Where do you see this?

In brokers' reviews and other reports about inflation.

What does this mean?

CPI stands for the Consumer Price Index, which is one of the key ways Singapore measures inflation, defined as the increase in the level of prices of goods and services.

The index measures the change in the prices of a fixed basket of goods and services commonly bought by the majority of households here.

Published by the Department of Statistics, the CPI covers a total of 5,170 brands and varieties.

Why is this important?

Inflation is one of the most closely watched indicators of the economy. Economists agree that low and stable inflation is ideal: that is, the prices of goods and services should inch up steadily and slowly over time as the economy grows.

But too much inflation, as we saw last year in Singapore, can lead to prices of food and other basic necessities spiralling upwards dangerously.

Conversely, deflation refers to a persistent fall in prices which hurts companies and leads to lower wages and higher unemployment. It is equally risky for the economy.

To get a handle on inflation, policymakers keep a keen eye on the CPI and adjust their policies as necessary.

So you want to use the term. Just say...

'It's so hard to save these days because the CPI's rising. Everything is becoming too expensive.'

Fiona Chan

This article was first published in The Straits Times.