Summarization of the article
The article I would like to discuss about is “The dollars and sense of inflation” for the Straits Times newspaper written by economics correspondent Aaron Low. In the article, the author discusses about the inflation report in Singapore which came with two indicators. The first was a breakdown of how inflation had affected the various income groups. According to the Department of Statistics (DOS), the top 20 percent of income earners face with a 5.7 per cent inflation rate due to the rising costs of private transport and property rental while the bottom 20 per cent saw prices rise by only 4.7 per cent.
Another new indicator by DOS excluded the costs of housing rents. DOS reasoned that since 87.2 per cent of Singaporeans own their own housing, the new indicator was complied “as an additional indicator to track households’ actual expenditures. In this indicator, the inflation rate for the lowest 20 per cent was just 2.2 per cent less than half the rate that the top 20 per cent experienced.
The writer mentioned that inflation is just half of the equation calculating the impact of rising prices on the welfare of people and how fast incomes have raised equally matters. The writer argues that the lower income groups may have been hit with lower inflation but their incomes also rise by less than what the top percent enjoys.
The writer mentioned that another reason not to worry too much about a rise in the consumer price index is that a large part of the price rise results from higher housing costs and higher costs of owning a car. The writer also highlighted what is more worrying is that prices are rising across the board. The Monetary Authority of Singapore’s core inflation stood at 2.6 percent in December, which is much higher than the historic rate that is usually below 2 percent. Health-care costs, education and stationary costs also