CGS-CIMB said that it has revised its inflation figure to 2.5% YoY in 2022 from 2.2 previously. It said that its current forecast includes the adjustments to more persistent commodity prices, as well as recent developments including the price controls and higher TNB tariff for non-domestic users.
It said that it believes that there is a limited risk of runaway inflation this time around and pressures will continue to build up over several months as the underlying factors are fully at play.
In fact, the research house said that it is unlikely to see a significant easing of price pressures on a global basis in the near term. “Some easing of supply chain issues and the subsequent lower freight costs will provide some offset, but we do not expect much relief,” it said
However, it said that contrary to current perceptions, we see little risk of inflation disrupting the economic recovery. It said that it expects the central bank to continue to focus on domestic growth, particularly the improvement in private consumption and the labour market.
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