Malaysia's June inflation rate at 3-year low after GST withdrawal

[KUALA LUMPUR] Malaysia's consumer price index rose at its slowest pace in more than three years in June, following the withdrawal of a goods and services tax (GST), government data showed on Wednesday.

The inflation rate in June was at 0.8 per cent, its lowest since February 2015, when it was at 0.1 per cent.

The figure was below the 1.3 per cent forecast by a Reuters poll and sharply down from the 1.8 per cent recorded in May.

The abolishment of GST as well as discounts and price control measures during the Eid al-Fitr celebrations had a significant impact on prices of goods in June, the Statistics Department said in a statement.

The new government led by Prime Minister Mahathir Mohamad, put in office after the May 9 general election, scrapped the 6 per cent consumption tax on June 1.

In June, costs were down across all goods and services except for the transport index, which rose 5.5 per cent from a year earlier due to higher domestic fuel prices, data from the department showed.

Malaysia's central bank left its key interest rate unchanged at 3.25 per cent in its last review, citing slowing inflation and steady economic growth.

REUTERS