Department of Statistics Malaysia (DSM) has released the inflation rate for April, which is only 2.9%, but the figure is very different from what consumers themselves feel. Why is this?
According to economists, the Consumer Price Index (CPI) or inflation as it is commonly referred to does not really reflect the true cost of living, which should be between 10% and 20%, not 2.9% as officially stated.
The Malaysian Consumer Price Index (CPI) includes tariff items which do not adjust retail prices and therefore reduce the rate of inflation. The index also includes products and services not normally required by the general public, such as hotels and construction materials, which also help to reduce the inflation rate.
For example, the price of low-quality white rice is controlled by the government, while the price of high-quality rice has skyrocketed. Pure palm oil cooking oil is classified as a standard product by the government, but the price of blended cooking oil continues to soar.
Economists cite exotic food as an example, where the price of meals in restaurants has gone up by 30 to 50 per cent. Where RM5 used to be a budget meal, now RM8 is not even enough.
According to a professor of resource and environmental economics, a person’s average salary must be around RM2,500 to be able to afford accommodation, food, transport and medical services.
