The Ministry of Trade and Industry (MTI) announcement came as it also said the city-state's economy grew at a slightly slower rate last year than originally thought.

The ministry said inflation would likely hit 3.0-4.0 percent in 2011, up from its previous prediction of 2.0-3.0 percent.

Its forecast prices to rise about 5.0-6.0 percent in the first few months of the year before moderating in the second half.

"Given the raised inflation outlook, be warned, that the central bank may tighten its monetary policy further in April," said CIMB regional economist Song Seng Wun.

Several Asian economies have recently raised interest rates in response to escalating inflation, largely driven by higher food and energy prices.

The World Bank said Tuesday that rising food prices have pushed about 44 million people into poverty in developing countries since June.

China, which this month hike rates for the third time in four months, said Tuesday inflation hit 4.9 percent last month, running close to a two-year high and sparking renewed speculation of more monetary tightening from Beijing.

South Korea, Australia and Taiwan have also been forced to increase lending rates as central banks try to be vigilant in the face of strong economic growth following the global downturn.

MTI also Thursday that Singapore's economy grew 14.5 percent in 2010, a little slower than the 14.7 percent figure given in January, which was based on preliminary estimates.

It retained its earlier projection of 4.0-6.0 percent growth this year.

The ministry also upgraded its total trade growth forecasts for 2011 to 8.0-10.0 percent from 6.0-8.0 percent.