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Singapore's policies focus on the long-term trend, said Mr Shanmugaratnam. -- ST PHOTO: THOMAS WHITE
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SINGAPORE'S inflation may slow in the second half from the preceding period, Finance Minister Tharman Shanmugaratnam said in Jakarta on Friday.
Speaking to reporters, he said the Government does not need to adjust its inflation forecast of 4.5 per cent to 5.5 per cent, reported Bloomberg news.
Singapore's policies focus on the long-term trend, said Mr Shanmugaratnam.
The Monetary Authority of Singapore expects 2008 inflation to average at the 'upper half' of its forecast range of between 4.5 per cent and 5.5 per cent, after prices gained 2.1 per cent last year. Inflation has accelerated in the past year partly because of rising raw material prices and after the Government raised the goods and services tax (GST) on July 1.
Global food prices surged 57 per cent in March from a year earlier, according to the United Nations. Rice prices gained today to US$23.45 per 100 pounds in Chicago, more than doubling from a year earlier. Crude oil futures yesterday climbed to a record US$124.53 a barrel in New York, also double the level a year ago.
'In medium term, I think inflation is rather stable,' said Mr Shanmugaratnam. 'We have to devise strategies that aren't just short-term mitigation but ensuring that regionally and globally, we have a holistic approach to food price inflation and fuel price.'
Singapore's central bank, in its twice-yearly review of the exchange rate, on April 10 unexpectedly targeted a stronger trading range for the currency to help ease rising costs of staples such as food and energy.
The Singapore dollar has gained 4.8 per cent this year, the second-best performer among 10 Asian currencies tracked by Bloomberg. The consumer price index jumped 6.7 per cent in March from a year earlier, the fastest pace in 26 years, according to the Department of Statistics.
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