Monday, March 23, 2009

Singapore Inflation for 2008 is 6.5%

So Singapore's Consumer Price Index (CPI) for 2008 climbed to its highest in 28 years. That is a whopping 6.5% !

What this means is that my money in the bank is basically being wiped out by inflation.

With a paltry < 1% bank deposit rate, the bank deposit rates are simply not sufficient to combat this high inflation.

But in reality, what are the prices that have truly gone up for my household?

I will say one word "Petrol". The prices of petrol has simply gone up so much.

Pumping a 95 octane fuel cost almost $1.40++ per litre. If I remember correctly, the highest grade of petrol used to be that price like 7 years back when I first started driving.

Other than petrol, I don't think my household has seen a significant increase in any other item.

Electricity bills did go up a bit during the end of the year but we managed to cut down on our air-con usage and stuff.

3 comments:

  1. Yes, that is why we need to keep money beside SGD.

    SGD is a small currency that cannot appreciate too much against most currencies as it is export dependent..

    It is a spineless currency I should say.. :)

    ReplyDelete
  2. Inflation is expected to ease quite a bit for 2009 as the financial crisis runs its course. I read that Feb 2009 inflation was just 1.9%. This is lower than the average inflation rate of 3% for Singapore. I would think that as long as our investments are able to generate a 3-4% yield, over the long term we can "beat" inflation and get a positive real rate of return.

    Petrol costs are high yes but they are still considered low compared to the heady days of July 2008 when oil was at USD 147 per barrel. Now oil is just USD 53 per barrel.

    As for electricity, the main culprits are heating and cooling devices like air-con and heaters/boiling water. Lights and TV + Computer don't take up much I realize. For me, I sleep with a fan unless it gets really too warm, then I switch to air-con.

    For me and my wife, electricity bill is usually less than SGD 50 per month. With the U-Save rebates given to 4-room flats, this means we can have about 2 months "free" utilities.

    Cheers,
    Musicwhiz

    ReplyDelete
  3. Wealth Journey,
    Can share what other currencies or investments then do you look into besides SGD? Yuan?

    MW,
    In this bear climate, hopefully we can gain 3 to 4% a year.

    The funny thing about petrol prices is that the rise is in line with the rise in oil prices but when oil prices fall, the price drop for petrol does not fall accordingly.

    Wow! Electricity bill of less than $50. I must really learn from you all. So far mine is always around $60 to $100. Think it is my lights. Not too energy efficient. I switch on the aircon perhaps once a week.

    ReplyDelete

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