Inflation Essay

1201 WordsOct 10, 20135 Pages
The article that I had picked was titled "Full-year inflation forecast lowered to 2-3%" is dated 24 July 2013.This article would bring about good news to Singaporeans as the preforecasted inflation rate of 3-4% will see a slight decrease although June consumer prices still inched up.These digits of 2-3% are probably the lowest that the Monetary Authority of Singapore has seen in three years.Private sector economists has also agreed saying that while inflation is no longer a major threat, we must still be cautioned about rising wages and rents. Overall inflation for the first six months of the year hit the lower income group the hardest with a 3.1% rise in price compared to with 2.8% with the rest of Singapore household, as shown by Singapore Department of Statistics. This growth forecast is mainly due to a gradual recovery in the global situation. The asset management has reached a new peak and that Singapore is now one of the more table insurance and reinsurance hub in a growing Asia. The key drivers of future growth in Singapore's finacial centre is said to be showing good promise. Inflation is defined as a sustained increase in the general level of prices for goods and services, an increase in the price of a basket of goods and services that is representative of the economy as a whole. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service. The value of a dollar does not stay constant when there is inflation. The value of a dollar is observed in terms of purchasing power, which is the real, tangible goods that money can buy. When inflation goes up, there is a decline in the purchasing power of money. For example, the same $50 used in 2001 may see a customer walk out of a supermarket with three full bags of groceries while in 2013, the customer might only walk out with a bag full

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