The Monetary Authority of Singapore said inflation will ease in the second half of 2011 after accelerating in the early part of the year.

“Headline inflation is expected to be higher over the next few months, mainly due to the recent surge” in car- permit and global food prices, the central bank said in an e- mailed statement today. “However, we expect it to moderate in the second half.”

The consumer price index increased 4.6% in December from a year earlier, the biggest jump in two years. The inflation rate may reach as much as 5% in the coming months, central bank Deputy Managing Director Ong Chong Tee said last week.

 

Singapore’s rebound last year from a 2009 global recession has fueled inflation, prompting the island to tighten monetary policy through faster currency gains and by taking steps to cool the property market. Private home prices rose to a record in 2010, while the cost of car-ownership permits surged as the economy expanded an unprecedented 14.7%.

 

“MAS continuously monitors price developments closely, and will announce any revision to the inflation forecast” next month, it said. It estimates consumer price gains will average between 2% and 3% this year.