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SINGAPORE'S two-percentage-point hike in the goods and services tax (GST) last year had a one-off effect on the city-state's inflation which recently reached a 25-year high, Finance Minister Tharman Shanmugaratnam said on Monday.
He told Parliament that the hike in sales tax was not expected to have a 'continuing effect' on consumer prices in Singapore.
He added that inflation resulting from higher property prices did not affect most Singaporeans who are home-owners and do not pay rents.
'The government has been keeping a close watch on inflation and the cost of living,' the minister said. 'The CPI increased for technical reasons which do not affect most households.'
Higher oil and commodity prices have stoked inflationary pressures in countries around the world from the United States to Hong Kong. Consumer price inflation in Singapore jumped to 4.2 per cent in November after averaging around 2 per cent for most of last year.
Mr Shanmugaratnam said the financial assistance provided by the government had 'more than offset' the rise in consumer prices felt by Singaporeans.
He said the government will unveil more initiatives in its fiscal 2008 budget, which is expected in February, to help poorer Singaporeans.
Singapore expects consumer prices to climb 3.5-4.5 per cent this year, peaking at around five per cent at the start of 2008, up from around two per cent in 2007, and from just one per cent in 2006. -- REUTERS
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