Singapore inflation in February 2008 highest since breaking hard peg

SINGAPORE, March 24, 2008 (AFP) – Singapore’s inflation rate struck an annual 6.5 percent in February, pushed up by higher food and housing costs, the government said Monday. Despite the surge, the government said underlying inflation remained stable and maintained its inflation forecast of 4.5-5.5 percent for 2008. Inflation for 2007 was 2.1 percent.

Higher costs in transportation and communications were also factors behind last month’s surge in consumer prices, the department of statistics said in its monthly report.

On a seasonally adjusted basis, inflation in February was 0.2 percent higher compared with January.

During February, food prices increased 6.7 percent over last year while housing costs soared 8.8 percent on higher accommodation costs and electricity tariffs with transport and communications costs up 7.6 percent.

The city-state, which imports virtually all its food needs, posted an inflation rate of 6.6 percent in January, the highest in 25 years since March 1982.

Analysts say Singapore’s inflation rate is likely to increase in the months ahead because of higher energy prices which will translate into bigger fuel bills and food producti