Sunday, January 3, 2010

Annual average inflation reaches lowest level since 1985 says CB

"Maintaining a low inflation rate generates numerous economic and social benefits. It encourages savings and investment, stimulates capital flows from non-productive investment to productive investment, thereby promoting economic growth and generating employment opportunities. Moreover, low inflation prevents the formation of adverse expectations,  and the resulting stability supports investors, consumers, planners and policy makers to make effective decisions. Low inflation also protects most vulnerable groups, such as fixed income earners, pensioners and low income groups as high inflation would erode their real income rapidly.

There was only a marginal increase in the Housing, water, electricity, gas and other fuel sub index by around 0.3% in 2009 compared to the last year. It was a combined impact of the downward revisions of fuel and gas prices and the increase in water tariff effective from February 15, 2009, and the increase in Nation Building Tax from 1% to 3% effective from early May, 2009."

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