Cost of living likely to rise further this year

The cost of living looks set to go up further this year after the Government raised its inflation forecast, citing high oil prices and rising labour costs.

In its twice-yearly review released on Friday, the Monetary Authority of Singapore (MAS) said it expects the consumer price index - the key inflation gauge - to rise to 3.5 to 4.5 per cent this year, up by one percentage point.

Core inflation, which excludes cars and housing and therefore tracks the price of everyday necessities, is expected to go up to 2.5 to 3 per cent this year - also up by one percentage point.

Inflation in Singapore is often affected by external factors such as oil prices, which MAS said will likely remain high for the rest of the year. But a tight labour market domestically has also resulted in higher wage costs which companies will likely continue to pass on to consumers, added the central bank.

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