Malaysia inflation rate surges to 4.7% in August, driven by rising food prices
Tan Ai Leng
MALAYSIA’S inflation rate continued to climb in August due to soaring food prices, with the consumer price index (CPI) rising 4.7 per cent year on year, a shade higher than the 4.4 per cent jump seen in July.
The latest data, released by the Department of Statistics Malaysia (DOSM) on Friday (Sep 23), was also in line with a 4.7 per cent forecast by a group of economists polled by Reuters.
On a monthly basis, the CPI moderated to 0.2 per cent in August, as compared to 0.4 per cent in July. For the first 8 months of 2022, inflation climbed 3.1 per cent, higher than the 2.3 per cent in the same period last year.
Higher food prices remained the main cause of the higher inflation, contributed by food and non-alcoholic beverages which saw a 7.2 per cent increase in August. Restaurants and hotels saw a 6.4 per cent increase in prices, while transport rose 5.2 per cent.
The department’s data found that 82 per cent of items (454 out of 552) saw their prices go up in August. Of these, nearly 6 in 10 had an increase of at least 10 per cent.
Core inflation, which measures changes in the prices of all goods and services excluding volatile items and administered prices of goods by the government – registered an increase of 3.8 per cent in August.
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Compared with other countries in South-east Asia, Malaysia’s August inflation rate was lower than Thailand (7.9 per cent), the Philippines (6.3 per cent) and Singapore (5.1 per cent). The department noted that Malaysia’s inflation rate was also lower than the Eurozone (9.1 per cent), the US (8.3 per cent) and South Korea (5.7 per cent).
Hong Chee Meng, the president of the Federation of Sundry Goods Merchants Association of Malaysia, said that despite rising food prices, about 30 items are controlled-price items that have government subsidies. These include rice, baby formula and cooking oil, which have helped ease the financial burden on consumers.
“However, as the cost of doing business increased – rising rental, labour cost and cost of imported goods – some of the sundry goods merchants, especially the new and smaller ones, are facing cash flow problems,” he told The Business Times.
Saizi Xiao, assistant professor of School of Economics at the University of Nottingham Malaysia, said that Malaysia’s inflation rate will continue to moderate in the next few months as the economy and income levels see an improvement.
“Revenge spending was the main reason for the surging inflation rate for the past few months, but the wave is over. The high employment rate and stable income will continue to fuel domestic consumption, which will support the country’s economic growth,” she said.
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