Singapore inflation rate hits new 26-year high of 7.5% in April

Singapore's annual inflation rate rose to a new 26-year high of 7.5 percent in April as food, housing and transportation costs soared and is now a risk to the economy, the government said on Friday.

Story continues at Singapore inflation rate hits new 26-year high of 7.5% in April

This increase in inflation is particularly frightening, especially to poor people, whose food budget is often a percentage of their monthly income.

If the inflation carries on, I wouldn't be surprised to see the Government call out to companies to increase employee wages. That would be the most drastic situation I see.

The other way, mentioned in the story, is to strengthen the Singapore dollar.

That would in effect mean increasing the cost of doing business in Singapore. Exports will suffer. But current oil prices are already increasing the cost of doing business.

It would be very interesting to see how MAS tackles this problem.