Singapore inflation is measured by consumer price index (CPI). The CPI indices for years 2007 to 2012 were:
2009: 100.0 (base year)
(Source: DOS Singapore)
Towards the end of 2007, the US sub-prime mortgage problem began and it became a full-blown global financial crisis in 2008/2009. Therefore, I chose to focus from year 2007 onwards.
Annual Inflation rates
The annual inflation rates for each year from 2007 to 2012 are listed below:
For year 2007, 2009 and 2010, CPI increased below 3 percentage points. At this level, inflation posed no significant hardships to residents where annual salary increments will be able to soften the impact of price inflation of goods and services.
The exception years were 2008 when CPI rose 6.6 percent; 2011 when it rose 5.2 per cent; and 2012 it continued to rise 4.6%.
In 2008, CPI was high at 6.6 per cent because of higher food prices, higher accommodation costs and electricity tariff, and higher costs of transport on account of dearer petrol and higher taxi fares.
In 2011, inflation of 5.2 per cent was due mainly to higher costs in accommodation, private road transport and food.
In 2012, inflation was 4.6 per cent due mainly from higher costs in accommodation and private road transport.
Inflation over Five years
Over span of 5 years (from 2007 to 2012), the CPI started from 93.2 in 2007 to end at 113.1 in 2012. The price increase was a substantial 21.4 per cent. The annual inflation rate shows the change from one year to the next. So the annual rate of inflation does not look frightening. But when I study the price index increase over a period of 5 years, it dawned on me that cost of living rose 21.4% over that period. No wonder I feel the pinch in prices of food, health care, and others.
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