The government cut subsidy off gasoline and diesel back in September by 20 sen per liter, resulting in a cool chart:


I am just showing this because it is an awesome chart. Price index can be boring because nothing really happens. In September, well, it jumped. Inflation on yearly basis had been creeping up slowing to 2% for the past few months. In August, it was 1.9% YoY. In September, it was up 7 percentage points to 2.6% YoY. You can see the cause of the jump from the chart above.

It should jump again in October because of the abolition of sugar prices. I am expecting inflation to go well above 3% YoY in 2014. The government however expects inflation in 2014 to be 2.5%-3.0% YoY. I just think the government projection is just too low given those subsidy cuts, further expected subsidy cuts in 2014 and simply, a growing economy (unless, disaster is up ahead somewhere).

Anyway, you can also see the drastic increase in inflation for the alcohol and tobacco category. Smokers would know why (cough, 50 sen, cough).

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