Higher wages, costs and consumer prices ahead

[SINGAPORE] As overall wage growth continues to strengthen above Singapore's historical average of 3.3 per cent, businesses here should brace themselves for intensifying cost pressures amid a further tightening labour market.

Since companies are likely to pass on more of these accumulated costs to consumers, inflation looks set to pick up in the next few quarters, before easing towards the end of 2014.

This was the view of the Monetary Authority of Singapore (MAS) in its twice-yearly Macroeconomic Review released yesterday, which analyses developments in the local economy.