Monetary Authority of Singapore Annual Report 2010/2011
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Consumer Prices and Wages Remain Elevated

In 2010, total employment grew by 115,900, three times that of 2009, with the labour force participation rate reaching a record high. In response to the strong economic upturn and tight labour market, wage growth accelerated in most sectors.

Meanwhile, sharp increases in car prices and global oil prices pushed domestic CPI
inflation up to 2.8% in 2010. (Chart 2) MAS Core Inflation, which excludes the costs of accommodation and private road transport, was lower at 1.5%.

Looking ahead, CPI inflation is likely to stay elevated after the 5.2% recorded in Q1 2011. The tight labour market will continue to exert upward pressure on costs and prices, while global oil and food prices are likely to remain firm given supply shocks and strong demand as the global economy slowly recovers.