REFSA Notes #7/2022: Deconstructing Economic Indicators: Inflation

For the last few months, inflation has been the talk of the town. Consumers have been complaining about rising prices, especially of food and groceries. Yet official statistics suggest that Malaysia's annual inflation rate remains under control at 2.8%. So why is there a mismatch between the perceived rise in the cost of living and the official rate of inflation? To answer this question, we must first identify the causes of inflation and critically review how we measure inflation.
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