The country’s inflation rate was recorded at 3.2 percent in December 2021, due mainly to the increase in the price index for the transport component which was recorded at 9.5 percent, and the food and non-alcoholic beverage component which was recorded at 3.2 percent. For 2021, the annual inflation rate is at 2.5 percent compared to -1.2 percent in 2020.
The increase in inflation rate is not only happening in Malaysia, but it is a global phenomenon that is also experienced by most other countries around the world due to supply chain disruptions and energy costs that increased sharply compared to 2020. For example:
The inflation rate in the United States rose to 7.0 percent in December 2021, the highest in 39 years since June 1982, in the Eurozone it has risen for the sixth consecutive month to a record high of 5.0 percent in December 2021;
• Inflation in the Republic of Korea rose 3.7 percent in December 2021, and it was the ninth consecutive month; and
• Among ASEAN countries, the Philippines recorded an inflation rate of 3.6 percent in December 2021 and Singapore recorded an inflation rate of 3.8 percent in November 2021.
The Government is aware that this increase in inflation has affected the cost of living of Malaysian families, especially the low-income ones.
In this regard, various initiatives have been and are being implemented by the Government in addressing the issue of inflation and rising prices of basic necessities to alleviate the burden of Malaysian Family members. Among the initiatives include:
• Through Budget 2022, the Government has allocated RM31 billion in subsidies, assistance and incentives, this includes subsidies for RON95 petrol and diesel, as well as cooking oil and flour. In addition, RM200 million is allocated to help reduce the price of essential goods for the rural population;
• Allocate RM400 million to stabilize cooking oil prices for 2022 as well as extend the cooking oil price control mechanism program until March 2022 at a cost of RM150 million;
• The Ministry of Domestic Trade and Consumer Affairs has implemented several initiatives to monitor the prices of goods. These efforts include mobilizing about 1,000 Pegawai Pemantau Harga (PPH) on a daily basis to monitor the prices of 480 items at 1,500 premises nationwide;
• The Government started the implementation of the Skim Harga Maksimum Keluarga Malaysia (SHMKM) effective 1 January to 4 February 2022 involving 12 types of basic food items; and
• Implemented Program Jualan Keluarga Malaysia (PJKM) of RM100 million, to be implemented in 222 Parliamentary constituencies until March 2022.
As for the medium and long term, among the issues that will be focused on are related to dependence on imports, costs to food production inputs, foreign labor issues, subsidy schemes, grants and soft loans, transportation and logistics, agricultural technology, and R&D.
In addition, the Government will tighten enforcement on relevant legislation such as the Price Control and Anti-Profiteering Act 2011 to ensure that traders always conduct business ethically and do not take the opportunity to take excessive profits resulting in increased prices of goods or services.
The Government constantly monitors the prices of goods, especially food items and takes steps to prevent unreasonable increases, thus reducing the burden on the people as a whole.