Day 7: Paranoia Commence

Today is the 7th day since the rush to the pumps. As of time of writing, companies have already started planning and strategizing on how they intend to face the upcoming inflationary pressure from the general price of goods. We see upward adjustments in fuel mileage claims with some companies offering higher adjustments than others but I suppose it is safe to say that a 20% increase is not too far off from the average.

It is so surreal when you keep hearing about inflation but sometimes we don’t really stop to watch how it works. I was lucky enough (or unlucky enough) to get the opportunity to observe and experience first hand the micro decisions leading to an across the board inflationary trend in the economy starting with the place I work.

Just for the record, I’d like to say that I am truly grateful for the decisions made by the management in my workplace in terms of tackling employee morale by swiftly addressing the individual cost of travelling and operating. Claims for gas mileage were of course increased and plans are already in place for slight upward adjustment in wages albeit with the ultimate cost being carried over to our billings to the client side. Nevertheless, I do appreciate their efforts for watching our backs.

However, what is truly interesting is that amidst the entire process of re-evaluating profits versus costs in an organization, I was presented with a real-time practical case study on Inflation 101. In the event a company such as mine adjusts itself in relation to its business ecosystem, we are essentially fuelling the upward ascend of inflation. We are essentially doing our part in driving overall cost of goods and services even higher. It is like a disease spreading across all industries just because of ONE commodity that we so heavily rely on.

Not too sure if you are able to see it and get excited the same way that I am looking now but eventhough this entire experience is not exactly ideal nor positive, I find that experiencing the inner mechanics of an economic cyclical change during times like these will give one an insight like no other.

Furthermore, such cycles happen only once every few years and now I am trying to draw out as much optimism as I can to observe as much during trying times like these. I know can’t do anything much about it since I am but a tadpole in a pond. I do however would look forward to seeing the kind of approach our central bank will take in relation to all matters concerning monetary policies.

I am undoubtedly curious on the timing and when will it be the right time whereby interest rates will be elevated to slow the economy down before we hit a lethal level of inflation. It does reminds me a lot on how a doctor is being given the ultimate and exciting responsibility of pulling the plug on an ailing patient… just that in this case, Malaysia’s economic outlook will very much depend on WHEN we decide to pull the plug and by how much.

As of now, there is still no solid indicator on when the central bank will decide to raise interest rates to curb the impending rise in inflation. I am just hoping that when the next wave of price adjustments take place, we will be more prepared than we were after going through this.