Perception versus reality: Why inflation often seems higher than it really is

(Sept 18): Chan Siew Guat, a part-time cleaner in her late 50s, sighs at how the price of her kopi, the oily local coffee brew, has been rising steadily at hawker centres and coffee shops in the CBD, where she works.

“It was 70 cents a cup not so long ago. Some places now charge up to $1.10,” she tells The Edge Singapore in Mandarin. “[The stallholders] are full of excuses about why they raised the price: ‘Water bills have gone up’; or ‘coffee [powder] has become more expensive’.”

A hike of 10 cents on a cup of coffee that used to cost $1 may work out to be an exorbitant and unreasonable 10% price inflation.

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