Economic Quandary

Frankly, I felt really annoyed lately with the inflation dilemma popping up in Malaysia. As far as I can remember, every year there will be at least 1-2 rounds of price hike, for whatever the reason. There is no room for most of us to breath; I cannot catch with this sort of inflation. It’s not just about our basic necessities but it extends to other services/taxes that out of nowhere emerge to add up to our monthly expenses. We all know that we have to pay taxes and I'm sure we all know that there are a lot of different taxes that we have to pay. Look at the various taxes implemented upon us; income tax, government tax, service tax, sales tax, and other kinds of taxes that we are liable for (I am still in absolute objection towards the RM50 service tax on our credit card. Thank god I have only one card). This is just enough to strangle us!

Forget about all those useless hogwash economics talk. All these while, I don't fancy in-depth economic topics; I don't really care about the inflation rate in percentage. I have been living in my comfy zone with lavish expenditures. For me, ignorance is bliss like how it is regularly quoted. But when I gradually morph from my comfortable and blithe lifestyle into late twenties which is a serious wake-up call for me to start looking at my financial plan ahead, I felt the fretfulness instantly. Thank god for having responsible parents (whom constantly reprimand on my generous spending) guiding me through the adulthood with poise. Right now, I have learnt to flick through the sections of economics/business to get a general insight on how to manage my fiscal plan (That’s why I’m embarking on this grave topic)

Now, all I know is the amount we earned every month is not adequate for our basic necessities. The huge chunk of the salary is kept aside for various loan servicing payments, absorbing the inflating prices of food items, transportation, utility bills etc. Let's not even talk about overspending; how do we cope with the additional costs which are totally unwarranted. At the end of the day, ‘How do we allocate for a decent saving for our future’? Suddenly you realize you’re going bonkers wondering what else to do to absorb the inflation rate. I don't care about the numbers given in the media, all I know is that I am going to have trouble coping will these entire price hike in time to come. People predict economy will slow down again, of course it will when people don't have money for anything else, do you expect economy to grow?? I don't think you need an economist to tell you that.




Every time when there is a hike, you can hear huge cry over the series of unfortunate upshots from the fuel and diesel hike in the media. But despite seeing the response of the whole economic anguish, it is brushed aside after the ‘hot’ episode. Only time will decide if all of us can survive from this alarming economic call. (It is no surprise that once again, the government can increase prices of petrol and diesel with regard to global market). These two items have been proved to be the main catalyst in driving inflation rates up in Malaysia. The excuse here is that we need to prevent the country from being bankrupt which is why the subsidy has been reduced. In the end, it burns huge hole in our pockets. Government might say, a hike of 5 cents is does not have a dramatic impact on our life. But all of us will be utterly disgusted to deny the burden in our expenses.

Given the latest round of price increases in petrol and diesel, I don't see how we can ever escape from the inevitable price increases and real inflation that we are going to see on the streets without the mandate by enforcement. Ultimately, food, transportations, utility bills, and other items will see a new price revision without warning. Who is going to comprehend the poor citizen’s plight and monitor our daily wrestle with harsh livelihood? The authorities can impose a strict reminder not to increase the price but will they be able to enforce it? Or will the business people abide to the caveat? One good paradigm scenario that I would bring into debate will be the fuel hike. When the global price increases, the Malaysian government will unconsciously blame it on the global market price to mandate the price hike. But when the global market sees a decline in the cost of fuel, nothing is said to cut-back the cost. It falls back on us to absorb the economic shock.

The inflation rate in Malaysia was last reported at 2.4 percent in January of 2011. The Malaysian inflation rate chart exhibits the average inflation rate is seeing a rise as from October 2010 (Source: TradingEconomics.com). We don’t need an economist to compute the increase in cost against the standard level of purchasing power. We can predict the relative purchasing power by formulating our very own financial plan. At individual level, the most important thing here is to start planning our future financial state by saving more and spending less (*Grinz* That sends out a signal for me to reduce my lavish shopping, fine dining, blah blah blah which is not easy for a women like me. But it will be a faux pas, if I don’t!). Cut down on redundant expenses and make life easy. On the other hand, at government level, they ought to devise a good policy to encounter inflation predicament for a better economic growth. Maybe with a good salary revision by comparing our incomes against expenses we are absorbing in? Or simply managing a good enforcement on prices of myriads commodities that affects the people on the whole? If something like this or close to it is put into place, then we might not end up in suffocation.