Monday, 17 December 2007

Don’t bother about inflation?

When the inflation rate was released a few months ago; as usual, only those social-political bloggers and perhaps some activists were making noise about how inaccurate it is and how the figure has been suppressed to create a ‘feel good’ factor amongst the rakyat. And as always, a lot of us didn’t really care. Our ‘tidak apa’ attitude was just so apparent.

Anyway, the rates published were…
For the year 2005/2006, the published inflation rate was 3.6% and for 2007, the inflation rate is 1.9% so far. There are some quarters which debated that the inflation rate is much higher. Would you agree?

The value-for-money and yet delicious pork noodles near my house increased its price from RM3.50 to RM4.00 per bowl recently. RM4.00 for a bowl of noodles may still be considered reasonable in the area that I stay in but the increase stands at 14.2% nonetheless. Then there is the very famous “pan mee” store near my house which increased its price from RM6 per bowl (for big portion) to RM6.50. That is an increase of 8.3%.

It is very obvious, to me at least, that the inflation rate is much higher than 1.9% for 2007. 1.9%? The more I look at the figure, the more I feel ridiculed by it. But like I said, many of us couldn’t care less. So what if it’s not overly accurate? Doesn’t really matter to you right?

WRONG!!!

Do you know that there are many companies out there, particularly Multi-National Corporations which formulate their annual staff increment policy based on inflation rate? A quick check with some of my friends who work in the human resource consulting industry also revealed that annual inflation rate is often used as a base to advice their clients on the appropriate increment.

Now, who are the clients of these human resource consulting firms and companies which formulate staff increment policy based on inflation rate? I don’t know about you but my company is certainly one of those.
You know how you always complain that prices of everything are going up except for your salary? Well, since many of you don’t give a damn about national inflation statistics… guess you can forget about appropriate increment, if you get any at all.

Anyway, just to digress…
Again? It’s getting too easy…

31 comments:

rational thinker said...

Hi Zewt,

Glad to raise this issue on your blog. When the inflation figures were first published, i felt that it is ridiculously low. Subsequently, i try to look for some sort of official methodology adopted for our inflation figures...and guess what, i can't find it. I don't know what sort of goods that are included in the calculation.

nevertheless, inflation index is one of the cornerstone of modern day economics. If the government cook the inflation figures, we re as good as fucked.

myop101 said...

hey zewt,

don't tell me you just realised this? as for me, i am keeping my fingers crossed. i hope i don't get the same...

as for the inflation index, i think the govt is still living in a dream state. if they are smart, they will adjust the basket and remove all those products under price control like rice, sugar, flour and such or at least give them very low weightage. that way, they can also attempt to lend some justification to increasing petrol prices, removing subsidies and such.

F.O.N @ frostee said...

SPot on dude! It doesn't seem like it's 1.9% and who are they trying to kid?

Man... I too work for an org which based the annual increments on 'market conditions' and 'inflation'

We are so screwed.

Huei said...

haH! damn msians..esp those who think that they're a SAINT just because they voted for um..er..other side! did u read that msiatoday article something about that? geez..and somewhere inbetween the comments of that article were insults to chinese telling chinese to go back to china.. *disgusted*

here a piece of sandwich that have 3 halves pieces of bread raised from 1.50 to 2.00...one and a half slice of bread!! the chinese (one and only) food here ALL raised by 30 cents..screw them people trying to rip us off!!

missironic said...

inflation is really screwing our lives eh? sighs..how to overcome this tragic situation?

m|ssK said...

well, clearly the price increase by these traders (eg, the pan meen seller!) are by estimate...simply agak-agak wan...but not based on the actual calculation of the % increase in the price of flour to make the pan meen or the price of pork in the pork noodle!!!

"Joe" who is constantly craving said...

really need to think what items have dropped price or havent increased only 1.9%.. they think only petrol price has been steady all year long meh..

anywayz its goin to be a 2 way battle from now onwards..Gunners rule!

Cosmic_GurL said...

Aaahhh...then last night must be a good nite for ya coz MU beat Liverpool huh? :P

zewt said...

rational thinker - well... do you think inflation figures are the only thing cooking?

myop101 - well... no matter how shitty it is, a lot of people out there are just not bothered. that is the sad part.

F.O.N @ Frostee - yeah... imagine we could have had an increment of perhaps... 15%? damn!

Huei - yeah... since the price of flour increased... all things went up. but our salary stays cos inflation rate is perceived as low. and sad to say... chinese ppl are the best in raising prices.

missironic - be more aware of things... dont just stay silent... make your vote counts.

m|ssK - i think their price increase policy is usually RM0.50 or RM0.30 .... not based on %... correct correct correct...

constant craver joe - the thing is... how 1.9% is arrived at is never revealed... as always. Gunners... gallas pushed the defender ler...

Cosmic_Gurl - hello there. welcome to AZAIG. very good night indeed... heh heh.

Supergirlfriend said...

No wonder I'm not getting my increments! Damn. :p

Congrats MU...I watched the game last nite. Can only say "too bad, Liverpool". :p

pablopabla said...

You are right about the cost of sundries and food rising. I can only predict further rise come January. Malaysians are indeed getting lesser for each ringgit nowadays but many choose to in a state of denial and prefer to feel good about it.

Same goes for Liverpool...still choosing to be in a state of denial and living on past glories. Woohoo!

www.keeyit.com said...

I need increment as previous increment also din follow the inflation rate :(

beeranyone said...

If you torture data sufficiently, it will confess to almost anything.

- Fred Menger

bubbly soda said...

Damn typical of you know la. It doesn't make us feel better as rakyat, it makes us feel cheated and therefore he result of it is us heading towards grassy path. right zewt?

l y n n w e i said...
This comment has been removed by the author.
l y n n w e i said...

wow, inflation is everywhere....

if salary dont incease...meaning ppl get poorer each day! oh no!!

thank u for sharing this!

sharlydia said...

many of us already knew this as a fact - WRONG inflation rate published. So what do u think we can do?

jasonphoon.com said...

I agree with you, the inflation rates are definitely too low.

Most companies do not adjust salary based on inflation, or even if they do, they use the "official" statistics. Where is the justice in that ?

Hey zewt, lets attend the next rally !!

Klaw said...

>>Same goes for Liverpool...still choosing to be in a state of denial and living on past glories. Woohoo!

Hahaha, I had to comment to congratulate the commenter on this.
Thanks!

Hafiz Noor Shams said...

Dear Zwet,

It is not impossible for the rate to be 1.9%. Prices in Malaysia are controlled.

In fact, you can observed the components of the CPI at the Statistics Department and see why it is 1.9%.

zewt said...

Supergirlfriend - man u rules! hehe

pablopabla - with each passing day, our purchasing power depreciates... sigh...

keeyit - mine too ler...

beeranyone - how to torture it?

bubbly soda - damn right. the things that are supposed to make us feel good are making things worst!

zewt said...

l y n n w e i - my pleasure as always. more ppl should get to know this.

sharlydia - vote lor... u registered already or not?

jasonphoon.com - hahaha... u sure?

Klaw - hahaha... as always. liverfools are all historians.

Hafiz Noor Shams - hello and welcome to AZAIG. i shall go and have a look. but whatever it is... the figure is NOT accurate.

stocktube said...

guess why we were being fed with such ridiculous figures? who put these clowns in their seat in the first place? feel your intelligence was insulted? well, don't be because it's not going to change as long as we swallow what was being presented blindly ... it's time to vote wisely ...

cheers ...

alan zed said...

good game though. see you at old trafford, heh.

zewt said...

stocktube - let's hope many will vote... at least vote.

alan zed - hahaha... 2-0 then perhaps?

william wang said...

Little wonder. Didn't we are led to believe that our inflation indices are based on roti canai & teh tarik. These are national passions, even our space participant had been suggested to perform. Back to reality, if we are not getting 10% salary increment, we are doing badly!

zewt said...

william wang - a lot of ppl out there never get 10% increment man... it's considred very high in commercial firms...

Jed Yoong a.k.a. freelunch2020 said...

it's bad man..1kg flour jumped from RM2.10 to RM4.60 or something. tai loh ah, how to tahan? petrol some more super power, fx sux some more...ok be positive, erm...erm...erm...if u have money, u can do anything in msia?

zewt said...

jed yoong - hahahahaha if i have money, i will do something but not in malaysia.

warrior2 said...

Determining the infla rate is not a simple thing as saying last year`s cost of mee noddle was 3rm and now it is 4rm. There is a technique and mechanism involved.

Thats what I know. Sorry I cant be more specific

zewt said...

warrior2 - hahaha... well, whatever it is... the rate shown is definitely not reflective.