Looks like Singapore is now feeling some inflation pressure. The small island nation raised its inflation forecast for 2011 and may be forced to raise interest rates.
Bloomberg reports in “Singapore Raises 2011 Inflation Forecast to 3%-4% After Record Expansion“:
“Consumer prices may climb as much as 4 percent this year while exports may rise 10 percent, the trade ministry said today. The economy expanded a revised 14.5 percent in 2010, with gross domestic product growing an annualized 3.9 percent in the three months to Dec. 31 from the previous quarter, it said.”
Bloomberg also quotes Ravi Menon, the permanent secretary at the trade ministry:
“The key macroeconomic challenge this year will not be growth but dealing with emerging cost pressures…At this juncture, we expect these pressures to be relatively contained although there may be some pockets of tightness that we should continue to be watchful for.”