This is a follow-up on our earlier post above.
Did the 2 previous GST hikes turbocharge SG inflation when GST increased from 7% to 9%?
When our GST increased from 7% to 8%, the nominal increase was 1% but the absolute increase was about 14.3% (1/7).
Let's assume that our business owners were not profiteering from the 2 GST hikes and only upped their prices by around 15% each. Notwithstanding the inflation cost, the previous 2 GST hikes had boosted the business cost by 32.25% ([1.15%^2]-1).
Therefore, a cup of coffee would need to increase from $1.20 to $1.60 (1.20 x 1.3225) just to defray the 2 GST hikes. If we were to include the inflation cost, it would not be a surprise to buy a cup of coffee at $1.80 at a coffee shop.
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