You get deflation if your inflation rate is negative, where one dollar today buys less than one dollar tomorrow.
Singapore’s consumer prices fell the most in almost three decades last year amid very low oil prices, lackluster economic growth and the soft housing rental market.
The favorite justification of the citizens why they need a good increment at work is that inflation is running rampant.
Well with the inflation rate as it is, you guys should be satisfied with any increment at all! Of course, increment is a recognition of how much value you add to your company and if you have contributed more than you should, there are grounds for increments.
Here are the past inflation figures:
- 2015: -0.5%
- 2014: 1%
- 2013: 2.4%
- 2012: 4.6%
- 2011: 5.2%
- 2010: 2.8%
- 2008: 6.6%
- 2007: 2.1%
- 2006: 1%
- 2005: 0.5%
Annualized the inflation rate for this 11 years is 2.3%.
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Wednesday 27th of January 2016
Great news, but not time to be happy yet! Inflation figures fell largely based on falling home prices and oil prices. Let's imagine you are a student, or young working adult.
1. You would probably not have a car, thus not benefiting from the cheaper petrol and COE prices. Furthermore, ERP is going to adjust upwards. Increased oil taxes also offset the true benefits of oil prices dropping sub 30 per barrel. 2. For the half of you who have already bought a flat (think 2013, 14), your home prices are already set in stone. For those of you planning to buy, it's great news, but likewise it's still an additional expense on top of what you are already using! Increasing bank interest rates also pushes the loans of existing floating loans higher. 3. Cost of food, entertainment and transport have largely remain the same. At least, the bak chor mee near my house market still sells for 3.50. Weekend movie is still 10.50 and up. Not to mention food courts in shopping centers. 4. Job stability, and economic outlook may cause you to be retrenched or take a pay cut or bonus cut.
Real benefit that can be felt by the majority would be pretty small. (The only falling price that is exciting would be the falling prices of stocks.)
Wednesday 27th of January 2016
hi liew, you did a great analysis there. i think you can look at it that if there is high inflation, your necessities will stay the same. but if you are looking for extravagant life style, you are in luck