SINGAPORE'S inflation accelerated in December to the highest since 1982, with higher food prices and transport costs pushing up the consumer price index to 4.4 per cent from a year ago.

Against November's 4.2 per cent rise, the index was up 0.5 per cent last month, in line with economists expectations and took inflation for 2007 up 2.1 per cent from 2006.

The rise was due in part to the 2 per cent hike in the Goods and Services Tax (GST) in July 2007.

Most analysts expect inflation in Singapore to climb in the coming months to as high as five per cent.

'The risk of inflation is definitely on the upside,' Ms Prakriti Sofat, an HSBC economist told Reuters. 'We expect inflation to peak around 5 per cent in 2008.'

She expects the Monetary Authority of Singapore to allow a rising Singapore collar to keep inflation in check.

Giving the latest inflation figures on Tuesday, the Department of Statistics said food prices, which make up 23 per cent of the index, rose 5.5 per cent in December from a year ago, following November's 5.2 per cent increase.

From November, food prices gained 0.6 per cent, and were 2.9 per cent higher for the whole of 2007, due to dearer cooked food, fresh vegetable, milk products and fruits.

Transport and communication costs, the second-biggest component at 22 per cent of the index, climbed 6.4 per cent in December from a year earlier.

From November, transport and communication prices rose 1.2 per cent due to higher taxi fares, car prices and higher petrol.

Housing costs, the third-largest component of the consumer price index, climbed 2.9 per cent from a year earlier, matching November's gain. From a month ago, housing prices was unchanged.

Recreation costs, which include holiday travel, gained 3.7 per cent in December from a year ago and rose 0.5 per cent from the previous month. Prices of clothing and footwear rose 2.1 per cent from a year earlier and fell 0.6 percent from November.

Health care cost rose by 4.1 per cent in 2007, reflecting higher charges for daily ward and medical treatment, specialist services, general medical consultation, dental treatment as well as dearer Chinese herbs.

With higher costs for both owner-occupied and rented accommodation more than offsetting lower electricity tariffs, housing cost moved up by 0.4 per cent for the year.

The MAS expects consumer prices to increase between 3.5 per cent and 4.5 per cent this year, after averaging 2.1 per cent in 2007. The central bank had forecast inflation to average two per cent last year.