The consumer price index (CPI) grew to a seasonally adjusted 0.6 percent in July, an increase from 0.4 percent in June, according to the Department of Statistics.
It added that housing costs, including utilities tariffs and imputed rentals, grew 9.5 percent in July, an increase from 8.8 percent in June. In addition, the department reported an increase in electricity tariffs this quarter, due to higher energy prices.
Accounting for 16 percent of the CPI, transport witnessed an 11.5 percent increase last month due to a sharp rise in car certificate of entitlement (COE) premiums from last year.
Aside from transport and housing, the prime inflation drivers this year, domestic cost pressures appear “more buoyant than initially anticipated,” said Selena Ling, an OCBC economist.
Leong Wai Ho, an economist from Barclays Capital, noted, “Producers and retailers have been passing on higher electricity and rent costs, and wage inflation is also gradually feeding through.”
He set his full-year inflation estimate at 4.8 percent, the upper end of the official four to five percent forecast range.
Meanwhile, Changyong Rhee, Chief Economist at the Asian Development Bank (ADB), noted that ADB is expected to increase its 2011 inflation estimate for Asia above the existing 5.4 percent, after consumer prices grew more than expected in H1 2011.
Source : PropertyGuru – 24 Aug 2011