Perceived price increase index remains high

By: Trademagazin editor Date: 2025. 12. 18. 10:44

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The consumer price index fell from its very high level in 2022-23 to below 5% by the beginning of 2024. Since then it has risen temporarily above this level for only two months (the latest data for September 2025 is 4.3%). The consumer inflation perception index – which fluctuates at a higher level – has declined more slowly, so the relative difference between these two indicators has remained high even compared to pre-2022 levels.

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This article is available for reading in Trade magazin 2025/12-2026.01

The population’s perception of inflation differs significantly from official inflation data. One reason for the difference between the two indicators is that individual households have different demands for goods and services.

On the other hand, people tend to perceive inflation based on their own experiences. If the price of a particular, frequently purchased product rises rapidly but the prices of other products remain stable, they perceive a higher inflation rate for the economy as a whole. It can also be observed that among the various social groups, the difference between the perceived inflation rate and the official inflation rate is the smallest among graduates and those in the top income decile, while it is the biggest among those with only a basic education, those in the lowest income decile and people over the age of 65 years. Although according to data from the Central Statistical Office (KSH), the rise in the consumer price index has slowed significantly and dropped below 5% on a sustained basis, the population doesn’t feel this.