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SINGAPORE (AP) -- Singapore raised its 2011 inflation forecast Thursday as a booming economy and surging global food and energy costs boost prices.
Prices will likely rise between 3 and 4 percent this year, one percentage point higher than the previous estimate, the Trade and Industry Ministry said.
The government said it expects inflation to peak as high as 6 percent in the first half before dropping in the second half.
A jump in food and fuel costs and robust economic growth have helped push prices higher throughout Asia, leading many of the region's central banks to raise interest rates in a bid to ease consumer demand and economic activity.
"The inflationary concerns in Asia may prompt further monetary tightening," the ministry said. "Domestically, the economy is also facing a tighter labor market."
Singapore's economy soared 14.5 percent last year, rebounding from a 0.8 contraction in 2009, as global demand for the city-state's exports recovered from a slump the previous year, the ministry said.
Gross domestic product expanded 12 percent in the fourth quarter from a year ago, compared with 10.5 percent in the third quarter, the ministry said.
Manufacturing soared 26 percent in the fourth quarter from the previous year while services gained 8.8 percent and construction dropped 2 percent, the ministry said. Visitor arrivals and tourism revenue jumped to record highs last year as Singapore's first two casino resorts opened.
The economy grew an annualized, seasonally adjusted 3.9 percent in the fourth quarter after contracting 16.7 percent in the third.
The ministry said in a preliminary report last month that GDP had jumped 12.5 percent last quarter from a year earlier and grown 6.9 percent from the previous quarter.
The ministry left this year's growth forecast of 4 to 6 percent unchanged.
"The steady pace of growth in the advanced economies is expected to lend support to Singapore's manufacturing activities," it said. "Strong visitor arrivals will continue to underpin growth in Singapore's tourism-related services sectors."
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