Monday, January 7, 2008

Consumer Price Index

Governments around the world always use inflation to note their ability to control the economy. They always point to the low inflation figure to say that their people are better off.

I have my huge doubt in consumer price index which are widely used to report on inflation. For example, in Singapore, the real-life fact indicates that there is at least 20% increase in wheat price, some percentage increases of prices of various products in the supermarket. Even the noodles and rices in hawker centre are provided with less portion or have increased by 20% or more. Yet, the government here reports a great number of inflation, at a mere 4% or around that. To add salt to the wound, the 4% inflation is said to be lower than the 5% average salary increment. Wow, many people were expected to say. Anyway, a simple calculation shows 1% betterment!! O really?!?! What about if the fact on the ground actually shows that people need to spend 10% more each month? Does it bother the government? Nay, I don't think so. Government in Indonesia and Singapore at least, seems to be attentive at their good inflation rate.

Another big challenge with Singapore's statistics is in the employment figure. I have met a number of jobless folks and it was always reported in the paper that more jobs are created. Now, for a crude example, if the jobs are created for people with ability A and there are numerous ability B who can't simply turn to ability A, does it mean that the economy is better? Well, the government says yes since there are lots more jobs than the applicants despite the hard fact that A LOT of people are jobless. Funny heh? I don't understand why it's so difficult for government officials to go down to the real field and feels for themselves the hard fact. Have they become so deluded?

1 comment:

Efendi said...

hey, baru tau le nge-blog juga ^^

hehe.. w add ke feed w :D