Inflation eases to near 1-year low

PETALING JAYA: Malaysia’s consumer prices rose at the slowest pace in 11 months, as it unexpectedly raised its benchmark interest rate by a quarter point earlier this month amid lingering price pressures.

April numbers rose 3.3% from a year earlier, matching the median estimate in a Bloomberg survey.

Core inflation, which excludes volatile prices of fresh food and government-administered items, registered a 3.6% increase, down from 3.8% in the previous month, according to a statement from the statistics department.

The price level increase was mainly contributed by restaurants and hotels which gained 6.6%, followed by food costs that recorded a 6.3% growth.

In its statement today, the department said the implementation of the Festive Season Maximum Price Scheme from April 15 to 30 had eased inflation to a certain extent.

The food-at-home component moderated to 5% in April compared to 5.6% in the previous month.

Meanwhile, the food-away-from-home component also registered a lower increase of 8.1% compared to 8.6% in March.

“The Menu Rahmah initiative, introduced by the government, to some extent helped in easing the inflation of food away from home from continuing to soar,” the statement said.

At the state level, nine states recorded inflation increases of below the national level, 3.3%. Kedah and Labuan recorded the lowest increase at 2%.

On the other hand, Putrajaya (4.1%), Sarawak (3.9%), Selangor (3.8%), Pahang (3.5%) and Perak (3.4%) recorded increases above the national inflation rate.

Price hikes in Malaysia have been on a downward trajectory since reaching a peak of 4.7% in August.

Malaysia joins regional neighbours Indonesia, Vietnam, the Philippines and Thailand, all of whom have observed cooling in prices recently.

“Inflation may need to cool further to reassure Bank Negara Malaysia that price expectations are anchored – if the ringgit continues to slide,” said Tamara Mast Henderson, Asean economist at Bloomberg Economics.

Source : FreeMalaysiaToday