'We are facing risks on both sides, but the balance of risk has shifted towards inflation,' said Ministry of Trade and Industry (MTI) Second Permanent Secretary Ravi Menon at a press conference yesterday.
'We expect food and oil prices to remain elevated in the near term and to feed through into domestic prices,' he said.
The MTI released figures yesterday showing that the consumer price index (CPI) had reached a fresh 26-year high of 7.5 per cent last month. The CPI is a key inflation indicator.
The ministry also yesterday raised its inflation forecast for this year.
Its full-year forecast range for CPI inflation is now 5 per cent to 6 per cent, up from 4.5 per cent to 5.5 per cent. This is the second time it has revised its forecast since the start of the year.
Straits Times 24/5/08
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