The nation’s inflation rate increased to 2.8% for the period January-July 2022, in parallel with Bank Negara Malaysia’s target of between 2.2% – 3.2% for 2022.
This increase is mainly driven by the food group and non-alcoholic beverages which rose by 4.8%, while transport rose to 4.4% and restaurants and hotels, by 3.6%.
Based on a month-to-month comparison, the increase in inflation for the month of July started to moderate to 0.4% compared to 0.6% in June 2022.
Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed, in a statement released today, said: These findings were among the results of the “Jihad Tangani Inflasi” Special Team, formed by the Prime Minister, which has successfully curbed the increase in prices of certain items.
He explained the inflation rate in July 2022 compared to July 2021 had increased by 4.4%. The trend of high inflation rates is a global phenomenon following increasing costs of production inputs and fuel prices. However, the Malaysian rate of inflation is one of the lowest in the world.
Internationally, the rates of inflation for the month of July, 2022 were lower than the United Kingdom (10.1%), Euro Zone (8.9%), United States (8.5%), Thailand (7.6%), Singapore (7.0%), Philippines (6.4%), the Republic of Korea (6.3%) and Indonesia (4.9%).
The rate increase in July was caused by rising overall costs in the sectors of food & non-alcoholic beverages, restaurants and hotels as well as in transportation.
Specifically, the Non-Alcoholic Food & Beverage Group recorded an increase to 6.9%. In addition, the cost of food increased by 7.8%, for those who eat out compared with 6.4%. for those who cook at home.
The Restaurant & Hotel Group recorded an increase of 5.8% in July 2022 due to increased spending at Restaurants & Cafes which increased to 6.0%. This is in line with the increase in demand following rising tourist arrivals and higher hotel accommodation rates.
Transportation recorded an increase of 5.6% in July 2022 due to the increase in the average price of RON97 petrol to RM4.73 per liter. This increase is in line with the increase in crude oil prices by 46.4% compared to the same in July 2021.
Mustapa added the government has implemented various initiatives to curb inflation and help the people face the issue of a higher cost of living. Inflation in Malaysia is lower due to the Government’s continued provision a larger subsidy allocation of RM77.7 billion for the year 2022 compared to the original budgeted amount of RM31 billion.
The government too will bear an electricity subsidy of RM5.8 billion to maintain the electricity tariff for all users for the second half of 2022.
According to the Department of Statistics Malaysia (DOSM), Malaysia’s inflation rate may have ended rising to above 12% if the government did not provide various subsidies to the people.
The government also implemented price controls through the ‘Keluarga Malaysia’ Price Control and the Festive Season Price Control Schemes. Under these schemes, goods where prices are controlled include sugar, wheat flour for general use, cooking oil in 1kg packets, chicken and eggs as well as RON95 petrol and diesel.
In addition, the government has expanded the ‘Keluarga Malaysia’ Cheap Sale Program (JMKM) involving 600 areas under various state assemblies across the country and to 13 parliamentary constituencies in the Federal Territories.
The program held from August to December this year offers daily necessities discounted up to 20 percent when compared with current market prices. A total of RM80 million has been allocated to make the JMKM program a success.
Efforts were also taken to strengthen enforcement at the border to ensure better control over smuggling of subsidised goods. The government presently is monitoring some 480 items in 1,500 premises nationwide on a daily basis. Enforcement based on The Price Control Act and the Anti-Profiteering Act 2018, as well as the Competition Act 2010 have also been enhanced.
In addition to the measures and initiatives implemented by the government, the role played by all parties including consumer associations, industry players and traders along with “Keluarga Malaysia” is very important in the effort to fight inflation.
