Singapore inflation on a high

Everyone gets hit by it, no matter how young/old/pretty/ugly the person is.

Yes, even babies are affected. And your pets are affected too.

What was i talking about? This is one big taboo word: Inflation.

Inflation is when prices continue to creep upward, usually as a result of overheated economic growth or too much capital in the market chasing too few opportunities. Usually wages creep upwards, also, so that companies can retain good workers. Unfortunately, the wages creep upwards more slowly than do the prices, so that your standard of living can actually decrease.

I remembered what i studied during my school-days, inflation is where the value of the money goes down and costs goes higher. It's an inverse relationship.

Let me explain.

Many years ago... Ok, not that many years ago, people pays 20 cents for a bowl of fishball noodles. Now, for the same bowl of fishball noodles, you need to pay a minimal of $2.50. The bowl, the ingredients, and the way the food is presented remains the same. Except u pay 12.5 times more for it.

Another example (specially for the students) of inflation in our everyday lives.

When i was in Primary 1, i get 40 cents per day; 10 cents to buy water, 20 cents to buy noodles for recess, 10 cents to save. Now, Primary 1 students must get at least at least 1 dollar in order to buy the same things!

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I often 'engage' in conversation with my mummy to increase my allowance when i was in secondary school:

me: Mummy, I need more allowance for today. I have tuition today and need to eat lunch.

(Mummy gave me $5, and....)

Mummy: u know ah, last time when i was your age, my mother only give me 50 cents and i can survive one whole day. (Wha biang eh, how can compare ah? 以前是以前；现在是现在)

me: But then last time *两毛大过牛车轮！I can't buy anything with 50 cents! ...

(Disclaimers: to all mothers whose children start to negotiate allowances with you using my example, 我是无辜的!!!)

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And the inflation over here is on a overdrive. Really scary. Yes, it affects everyone, everywhere.

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Singapore's inflation hits 25-year high of 6.6%
By Margaret Perry, Channel NewsAsia

SINGAPORE - Singapore's annual inflation rate hit a 25-year high of 6.6 percent in January, according to Department of Statistics (DOS) data released on Monday.

The inflation rate, as indicated by the consumer price index (CPI), was the highest since the 7.5 percent hit in March 1982.

From a month earlier, consumer prices in January rose 1.5 percent on a seasonally adjusted basis, the DOS said.

The Ministry of Trade and Industry (MTI) issued a statement along with the DOS data, saying the year-on-year jump in inflation in January was due to one-off factors such as a housing value revision and that it was in line with the official inflation forecast of 4.5-5.5 percent for 2008.

The MTI said inflation would start to ease in the second half of the year. In December, the annual rate was 4.4 percent. "The 6.6 percent year-on-year increase in the CPI in January 2008 was consistent with the official inflation forecast of 4.5 to 5.5 percent for 2008 as a whole," the MTI said.

The DOS said the jump in inflation was due largely to an 11.1 percent spike in housing costs recorded after a revision to values of public housing. Housing costs, which account for 21 percent of the consumer price index, have the third-largest weighting after food and transport/communication.

Food prices, which carry the largest weighting in the CPI, rose 5.8 percent in January from a year earlier. Transport and communication costs rose 6.9 percent between January 2007 and January 2008, driven by soaring global fuel prices and higher taxi fares. Higher petrol prices also contributed to a rise in transport costs for food.

This, coupled with higher global food prices, means more expensive grocery bills. However, one local supermarket chain has extended a discount scheme to help shoppers cope with rising costs.

NTUC FairPrice has given customers 5 per cent off prices of 500 of its housebrand products since mid-December 2007. The discounts, originally due to finish at the end of February, has now been extended until the end of April. The extension is costing FairPrice S$1 million and is part of the company's "Stretch Your Dollar" programme.

In the heart of Singapore's financial district, many were not surprised to hear the latest inflation figure. Many have already tightened their belts. "I have a family, so I have to plan our expenses and cut out unnecessary spending and then maybe make some investment to cover the shortfall," said a member of the public.

"Shop around a bit more, do a bit of homework (before buying anything). It's a bit tedious, but at the end of the day it's your pocket," said another.

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Is this crazy or what? SAVE OUR MONETARY VALUE!

What does it mean to you, you may ask. Seriously no one knows how bad it will get in the next few years.

All i can foresee is, 5 -10 years down the road, $2.50 can't get your a decent bowl of fishball noodles. Maybe $4 can.

*两毛大过牛车轮 = This means that 20 cents in the 1960s - 1970s are regarded as high in value, because it might probably be able to buy a cart-wheel.