Monday, December 3, 2007

Whats in the INFLATION figure?

INFLATION could hit 5 per cent in the first quarter of next year. This would be a 25-year historic high. Inflation is defined as the general price increase in the economy.

In Singapore, the measure of inflation is the annual change in the Consumer Price Index (CPI). It is based on a fixed basket of goods and services consumed by majority of household in Singapore.

There are seven broad categories of Goods and Services in the CPI Basket. Following are their weightages:

1. Food - 23%
2. Housing - 21%
3. Transport and Communication - 22%
4. Clothing and footwear - 4%
5. Healthcare - 5%
6. Education - 8%
7. Miscellaneous - 17%

Inflation this time round are caused mainly by the higher food prices such as eggs and dairy, live animals and vegetables. Food forms the largest chunk of the CPI. The higher cost of transportation due to higher oil prices and higher housing rental due to strong demand also pushes the CPI upwards.

Guys. If you still think that putting your money in the bank is the safest way to keep you money? Think carefully. I shall share some investment ideas with you in my next posting.


Anonymous said...

Ya, food very expensive..roti john up from $2.5 to $3. yesterday my plate of noodles same price $3 but have much less noodles...

Anonymous said...

This is really bad. Taxis are also up.

Life is getting harder and harder to survive.

Khiat Han Hwee Adrian said...

Inflation Risk is inevitable. It is control by the ecomomic of Supply and Demand. Of course there will be some external factors that pushes it up.

If we cannot control it, then we have to manage it. Ensure that our money is working harder than Inflation.