• Public scepticism on the CPI has increased as their personal experiences suggest larger increase in cost of living. However, cost of living and inflation are two different concepts, and public perceptions of inflation are subject to biases.
• Due to the biases, measures of perceived inflation were higher than CPI inflation, especially at times of rising inflationary pressures. This could influence public’s expectations of future inflation, and in turn might change their consumption and investment decisions.
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