Inflation may reach 5% in 1H 2011
Increasing commodity prices may exacerbate the CPI inflation, OCBC said.
The official CPI forecast for 2011 is still a relatively benign 2-3%; but the increasing commodity prices, especially for energy and food prices, may increase the CPI inflation given they carry more than 30% weightage in the CPI basket.
Rising inflationary presure may start to bite into the household incomes, given that the CPI is likely to exceed 4% and maybe reach 5% in the first half of this year.