Consumer prices hit a 14-month high in May, climbing 3.2 percent on-year, according to the latest data released by the Department of Statistics (DOS).
The increase was mainly due to higher housing, food and transport costs. Housing costs increased 1.6 percent as a result of higher gas and electricity tariffs, food prices surged 1.3 percent driven by price hikes in seafood and prepared meals, and transport costs rose 15 percent due to higher petrol and vehicle prices.
On a month-on-month basis, the consumer price index increased 0.6 percent last month. During the first five months of 2010, the consumer price index was 1.8 percent higher compared with the same period last year.
Mr. Irvin Seah, an economist at DBS, said the 3.2 percent on-year increase in prices was consistent with the expectations of the bank. He believes that the strong 15.5 percent domestic growth in Q1 and an expected double-digit gain in Q2 are likely to cause inflation in the following months.
Inflation will hover around the three percent mark for the rest of the year in spite of an expected moderate growth, said Mr. Seah.