CPI basket

Updated 20 Dec 2007: Breakdown of the 2002/2003 CPI basket

Saw that they published the Singapore CPI basket so I thought I would leave a note here. This is based on the 2002/2003 housing expenditure will be updated every 5 years. Hmm... That means it should be updated soon.

Housing: 21%
Transport: 17%
Recreation & Others: 17%
Cooked Food: 13%
Non-cooked Food: 10%
Education & Stationary: 8%
Communication: 5%
Health Care: 5%
Clothing & Footwear: 4%


Looking at the CPI basket, inflation for the coming November and December might really hit about 3.6% to as much as 4%. Food inflation is evident across many countries, and all the mad cow, bird flu diseases doesn't help. Price of oil affects more than 2/3 of the CPI basket.

Without going into details, based on this broad category, inflation for this year should be around 2% to 2.1%. Next year will be interesting. Average inflation will should hit at least 3.2% based on the current sky high prices, and other countries refusal to reign in their over-growing economies.

Regardless of the inflation rate for both this year, or next year, you can see that our savings rate of 0.25% p.a. means that we're losing money every day due to high inflation eroding our savings.

Some economists say that wage inflation will help in mitigating the rise of cost. What wage inflation??? They assume everyone is having a raise just because finance, and O&G sector is booming?? Every company is finding ways and means to cut cost. What wage inflation?? More like wage deflation soon.

Anyway, seems like the CPI basket might be reviewed soon. I'll see if there is any news about it.