24-09-2011, 07:46 AM
Your dividend yield has to be higher than 5.7% in order to beat inflation, or else your money will be eroding slowly.....
The Straits Times
Sep 24, 2011
Inflation higher than expected in August
Surge a result of higher accommodation, food, private transport costs
By Yasmine Yahya
INFLATION in Singapore rose more than expected again last month, as consumer prices jumped 5.7 per cent compared to the same month a year earlier.
This was more than the median estimate of 5.15 per cent by economists polled by Reuters, and the highest level that inflation has reached so far this year.
Compared with July, inflation edged up 0.7 per cent.
The Department of Statistics (DOS) said in a statement that the surge in inflation in August was a result of higher costs of accommodation, private road transport and food.
'The higher accommodation cost reflected mainly higher imputed rentals of owner-occupied accommodation which has no impact on the cash expenditure of owner-occupied households,' the statement said.
Excluding accommodation costs, inflation was 4.4 per cent higher in August compared to the same month last year.
The higher cost of private road transport was primarily due to the significant increase in Certificate of Entitlement (COE) premiums.
Dearer prepared meals, fresh fish, dairy products and eggs as well as meat and poultry led to a 3 per cent increase in food prices, the DOS said.
The only categories of consumer goods registering price drops were clothing and footwear, and communication.
The cost of clothing and footwear fell 0.4 per cent in August from a year earlier, while phones cost 2.5 per cent less.
Between January and August, inflation was 5.1 per cent higher than in the first eight months of last year.
Excluding accommodation costs, the cost of living rose by 4.2 per cent during the same period.
UOB economist Chow Pen Nee said that in the months ahead, inflation should moderate slightly, although it could still hover between 5 per cent and 5.5 per cent over the next few months because of higher accommodation costs.
'The slowdown in economic growth seems to have dampened consumer sentiment, with the latest COE prices dipping, and lower commodity prices possibly lowering the costs of food and fuel. All this should help ease inflationary pressure,' she added.
For the full year, Ms Chow expects inflation will stand at 4.6 per cent.
Citigroup economist Kit Wei Zheng said that despite the unexpected increase in inflation, the Monetary Authority of Singapore (MAS) will likely ease monetary policy, which will allow the Singapore dollar to appreciate more slowly.
This means that imported goods will cost more to Singaporeans.
'Importantly, the MAS' emphasis on core inflation - which has been stable, if still above historical averages of 1.7 per cent - is a signal that it will not be overly constrained by price pressures from cars or housing accommodation, which the exchange rate policy cannot directly influence,' said Mr Kit.
'Furthermore, some forward looking indicators of inflation - including import prices and COE premiums - are already easing.'
yasminey@sph.com.sg
The Straits Times
Sep 24, 2011
Inflation higher than expected in August
Surge a result of higher accommodation, food, private transport costs
By Yasmine Yahya
INFLATION in Singapore rose more than expected again last month, as consumer prices jumped 5.7 per cent compared to the same month a year earlier.
This was more than the median estimate of 5.15 per cent by economists polled by Reuters, and the highest level that inflation has reached so far this year.
Compared with July, inflation edged up 0.7 per cent.
The Department of Statistics (DOS) said in a statement that the surge in inflation in August was a result of higher costs of accommodation, private road transport and food.
'The higher accommodation cost reflected mainly higher imputed rentals of owner-occupied accommodation which has no impact on the cash expenditure of owner-occupied households,' the statement said.
Excluding accommodation costs, inflation was 4.4 per cent higher in August compared to the same month last year.
The higher cost of private road transport was primarily due to the significant increase in Certificate of Entitlement (COE) premiums.
Dearer prepared meals, fresh fish, dairy products and eggs as well as meat and poultry led to a 3 per cent increase in food prices, the DOS said.
The only categories of consumer goods registering price drops were clothing and footwear, and communication.
The cost of clothing and footwear fell 0.4 per cent in August from a year earlier, while phones cost 2.5 per cent less.
Between January and August, inflation was 5.1 per cent higher than in the first eight months of last year.
Excluding accommodation costs, the cost of living rose by 4.2 per cent during the same period.
UOB economist Chow Pen Nee said that in the months ahead, inflation should moderate slightly, although it could still hover between 5 per cent and 5.5 per cent over the next few months because of higher accommodation costs.
'The slowdown in economic growth seems to have dampened consumer sentiment, with the latest COE prices dipping, and lower commodity prices possibly lowering the costs of food and fuel. All this should help ease inflationary pressure,' she added.
For the full year, Ms Chow expects inflation will stand at 4.6 per cent.
Citigroup economist Kit Wei Zheng said that despite the unexpected increase in inflation, the Monetary Authority of Singapore (MAS) will likely ease monetary policy, which will allow the Singapore dollar to appreciate more slowly.
This means that imported goods will cost more to Singaporeans.
'Importantly, the MAS' emphasis on core inflation - which has been stable, if still above historical averages of 1.7 per cent - is a signal that it will not be overly constrained by price pressures from cars or housing accommodation, which the exchange rate policy cannot directly influence,' said Mr Kit.
'Furthermore, some forward looking indicators of inflation - including import prices and COE premiums - are already easing.'
yasminey@sph.com.sg