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Smart consumers can cut inflation

Perhaps he was misquoted or he needs better economic advisers to explain elasticity but essentially economy minister Rafizi Ramli is advising us to be smart consumers and not to be suckers when it comes to price rises. He is right.

Inflation in Malaysia has changed from specific price rises in fuel, utilities and food, which is not formally inflation, to general rises in prices across the Consumer Price Index (CPI) categories, which is formally inflation.

This embeds inflation expectations and consumers expect prices to rise even for products with cheap production costs. They shrug their shoulders and accept it.

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