Tuesday, January 29, 2008

Inflation Rate Kept at 2.4%

"A continuous effort by the Government to keep the inflation rate as low as 2.4%... Malaysia’s inflation rate is the lowest in the world and this mirrors the government’s efforts in keeping the prices of essential goods low"

—Deputy Prime Minister, Datuk Seri Najib Tun Razak

About a year or two ago, I used to spend about RM18 for the content of an average cooking gas (excluding the gas cylinder). About 3 weeks ago, I had to pay RM28 for a similar amount of cooking gas.

Within the same time frame, prices of other common household goods have also increased substantially. For example, a loaf of bread which used to cost RM1.80, now costs between RM2.30 and RM2.60.

In the construction industry, prices of cement, steel and many other materials have also increased. Prices of houses have also increased steadily over the recent years—at least in Kota Kinabalu, Sabah.

Not forgetting the prices of fuel (which is of course soon to be revised, probably almost immediately after the general election).

Even if one were to have a meal in the coffee shop, he will feel the increase in prices of food and drinks: Teh-C ping (my favourite drink) used to cost RM1.60, but now RM1.80. Nasi campur in general cost 50 sen more per plate.

Hell, in fact almost everything a typical household would spend on has increased in price over the last year.

And although I haven't been doing A-Level maths for over 20 years now, it seems to me that the inflation rate in Malaysia is a whole lot more than the 2.4% announced by the good Deputy Prime Minister. I am sure the brilliant economists who compiled the data for the Minister have valid justifications for that figure. We are truly a lucky nation—isn't it reassuring that Malaysia has the lowest inflation rate in the world?


Anonymous said...

you didnt undestand the context of lowest inflation in the world that were talked. its not about comparing previous years inflation to this year. It is still the lowest inflation rate but it still high if compare with before because the inflation rate increase is not only in Malaysia but globally because of scarcity of oil. while some hawkers and food stall you keep eating and complaining about might have abuse the story and increase their price while government still working hard and subsidize for our oil. talked about being an ungrateful citizen. yet you dont know why singaporean and thailand people like to come over and fill their oil tank? we're sure being rip-off by some smart-ass neighbour stealing our subsidized oil which part of it come from our taxes.

Cornelius said...

Thank you for your comment.

I shall not pretend that I can understand the "lowest inflation rate in the world" as announced by the DPM. As I said, I am sure there must be some sort of justifications for such claim.

But I can tell you that many other lay people in the street don't understand that claim either. To people like us, the phrase "inflation rate" means simply the (margin) rising prices when compared to a given timeframe in the past. And it's in this context that we redicule the official 2.4%. What we know for certain is that we are spending much more than 2.4% increase to get the same basket of goods today when compared to a year ago. We have obviously understood "inflation rate" wrongly, but we are not all economists, are we?

This may come as a surprise to you, my friend, but I am grateful to be a citizen of Malaysia—although I am only a second class citizen. It is not ideal, but perhaps much better than many other countries.

And talking about taxes, let me tell you that I pay quite a bit too. And therefore I am unhappy when some of the taxes are lost to our neighbours. Perhaps the relevant authority should step up their efforts to curb leakages of these subsidized resources to the neighbouring countries, what do you say?