Inflation expected to rise
Inflation in Singapore will pick up in the next few quarters as domestic cost pressures intensify.
This is according to the Monetary Authority of Singapore or M-A-S's Macroeconomic Review.
Labour-intensive sectors like retail and food and beverage will face a relatively greater labour crunch, in view of the curbs on the inflow of foreign workers and higher levies.
Greater reliance on Singaporean workers has pushed resident wage growth to 4.5 per cent in the first half of this year, from 2.3 per cent in 20-12.
In particular, MAS expects domestic food inflation to rise from around 2 per cent in 20-13 to close to 3 per cent in 20-14, as cooked food vendors pass on the increases in labour and rental costs to consumers.
Meanwhile, services inflation is expected to rise from 2.7 per cent in 20-13 to 3 per cent next year.
This is the first time in almost 20 years that services inflation stays over 2 percent for three straight years.
Overall, the MAS expects "modest growth" in the Singapore economy.
Its GDP is projected to grow at 2.5 and 3.5 per cent this year and in 20-14.
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