The word inflation scares many adults, as it could lead many to strategizing their budgets for the month. But some aren’t still familiar with how inflation works here. So, let’s dive into it.
What is Inflation?
Inflation is defined as the increase in prices and a drop in purchasing power of consumers over time. The increase in pricing, which is frequently stated as a percentage, signifies that a unit of money buys less than it did previously, usually occurring when the cost of living rises in the country.
How Does The Inflation Rate Affect The Economy?
When prices go up, consumers need to spend more to buy the same quantity product or service they had previously. As for investors, it affects the return rates of their investments too. Yes, it does mean spending more for most of us, but inflation isn’t all that bad depending on how it is viewed.
Inflation Data
Let’s look at the data of Southeast Asian countries and some top economic countries here.
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020* | 2021* | |
| Malaysia | 2.1 | 2.1 | 3.8 | 1.0 | 0.7 | -1.14 | 2.48 |
| Singapore | -0.5 | -0.5 | 0.6 | 0.4 | 0.6 | -0.18 | 2.31 |
| Myanmar | 9.4 | 7.0 | 4.6 | 6.9 | 8.8 | 5.73 | 3.64 |
| Cambodia | 1.2 | 3.0 | 2.9 | 2.5 | 1.9 | 2.94 | 2.96 |
| Vietnam | 0.6 | 2.7 | 3.5 | 3.6 | 2.8 | 3.22 | 1.87 |
| Indonesia | 6.4 | 3.5 | 3.8 | 3.3 | 2.8 | 2.03 | 1.56 |
| Brunei | -0.3 | -0.4 | -1.3 | 0.1 | -0.3 | 1.94 | 1.5 |
| Laos | 1.3 | 1.6 | 0.8 | 2.0 | 3.3 | 5.1 | 3.75 |
| Thailand | -0.9 | 0.2 | 0.7 | 1.1 | 0.7 | -0.85 | 1.23 |
| Timor-Leste | 0.65 | -1.47 | 0.52 | 2.29 | 0.89 | N/A | N/A |
| Philippines | 0.7 | 1.3 | 2.9 | 5.2 | 2.5 | 2.39 | 3.93 |
| USA | 0.1 | 1.3 | 2.1 | 2.4 | 1.8 | 1.25 | 4.69 |
| Japan | 0.8 | -0.1 | 0.5 | 1.0 | 0.5 | -0.03 | -0.24 |
| United Kingdom | 0.0 | 0.7 | 2.7 | 2.5 | 1.8 | 0.85 | 2.59 |
| China | 1.4 | 2.0 | 1.6 | 2.1 | 2.9 | 2.39 | 0.85 |
| India | 4.9 | 4.5 | 3.6 | 3.4 | 4.8 | 6.18 | 5.51 |
Do note that ‘*’ was taken from Statista.
Malaysia’s Economy Forecast of 2023
Taken from the news outlet Economist, it states that Malaysia’s growth is projected to be at 4% in 2023, though there is a chance the global economy may fall into a recession. Surely, it will affect Malaysia with weaker global demand, lower energy and commodity prices, as stated by the Ministry of Finance’s assessment.
Juwai IQI’s economist, Shan Saeed mentioned that Malaysia’s inflation rate would be projected to remain between 2% and 3%, based on the premise that Malaysia produces most of its necessities. Malaysia is still secure when it comes to food and basic necessities too.
How About The Ringgit?
Malaysia’s Ringgit will be predicted to be stronger, with RM4.10 to RM4.37 against the USD Dollar.
But why?
The American dollar is most likely to depreciate as FED hits the pause button. The higher oil and commodity prices will aid in driving Malaysia’s growth. Trade and the commerce industry will continue to remain on the upsurge too, as mentioned by Shan Saeed.
What’s The Solution To Combat Inflation?
Almost everyone will be affected by inflation here, especially when you are trying to have some savings at the end of every month.
No matter how many jobs you take up, will it ever be enough?
Why not working in real estate? It has been one of the most fruitful jobs, as it is rewarding if you put in the hard work. Hence working in real estate will be one of the best choices you can make for yourself as property is always in demand, especially right before the inflation hits. Prices of property will increase following the inflation rates, driving up the commission rates as well.
Conclusion
Inflation will remain subdued as higher income is going to protect the consumer. As long as income level is higher than cost of living, economy continues to maintain momentum and economic confidence at the macro level.
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