Malaysia Records 3.1% Inflation Rate In Line With Market Expectations – Govt

National inflation increased 3.1% for the period January to August 2022, said Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed, adding the rate is still in line with market expectations of a 3.2% yardstick for 2022.

In a statement released today, he attributed that this was driven by a strong domestic demand, prices of commodities which are relatively high and to the disruption in global supply chain.

Among the sectors which recorded an increase for the period January-August 2022 were Food & Non-Alcoholic Beverages (5.1%), Transportation (4.5%) and Restaurants & Hotels (4.0%).

The increase in the Food & Non-Alcoholic Beverage group over the period was mainly contributed by the increase the meat subgroup (9.2%), followed by milk, cheese & eggs (7.3%).

The Transport sector recorded an increase of 4.5% mainly due to the increase in the average price of Brent crude oil by 58.4% in the first eight months of this year.

Restaurants & Hotels also recorded an increase of 4.0% over the period, compared to 0.2% in the same period last year.

Overall, Malaysia’s inflation rate in August 2022 rose slightly to 4.7% (July 2022: 4.4%).

The minister said: “The inflation rate is still high due it being a global phenomenon, this is also experienced by many other nations due to the increase in production inputs and fuel prices.

“For example, the 7.2% increase in respect of the Food & Non-Alcoholic Beverage group, was driven out-of-home food components which increased by 8.4%, while food-at-home increased by 6.4%, he said, adding, there were still food items that recorded a decrease in prices compared to the previous month of July 2022 such as chicken (-3.8%), sea bream (-2.4%) and for vegetables such as cucumber (-4.6%), chickpeas (-3.6%) and round cabbage (-2.6%),” he said.

Mustapa stressed that Malaysia’s inflation rate is one of the lowest in the world. He drew a comparison to other countries and cited the rates of the Euro Zone was 9.1%, US (8.3%), Thailand (7.9%), Philippines (6.3%) and South Korea (5.7%) for August 2022.

“Malaysia’s lower inflation rate is the result of measures taken by the Keluarga Malaysia Government which provided the largest subsidy in history of the nation,” he added.

Based on a month-to-month comparison, the increase in the rate moderated to 0.2% compared to 0.4% in July 2022. This was mainly contributed by the Food & Beverage Non-Alcoholic group and the Transportation sector which increased lower compared to the previous month.

The government through the Special Jihad Against Inflation Task Force Team implemented positive measures and initiatives to curb inflation and ensured the people were not too burdened by the rising cost of living. Among the steps measures include:

– to control the price of chicken and eggs while allocating subsidies estimated at RM1.1 billion;

– controlling the prices of bottled palm oil by setting a ceiling price based on the global commodity prices of crude palm oil;

– Continued price controls on commodities such as rice and white sugar as well as the price of natural gas, the prices of these commodities were higher in the open market, and one of the main cost factors which caused the increase to production inputs.

– a continued effort to provide fuel and energy subsidies on petroleum i.e., RON95, diesel and natural liquid gas with a subsidy amount of over RM31 billion. The government also subsidises the electricity tariff as much as RM5.8 billion to control the increase in electricity tariffs despite the price increasing world fuel and gas costs;

– the effort to subsidise 1 kg packet cooking oil at a rate of RM2.50 compared to the actual price of RM7 to RM9;

– Expanding the ‘Program Jualan Murah Keluarga Malaysia (PJMKM)’ to 512 State Assemblies (DUN) or 80.1 percent of the 639 DUNs since mid-August 2022. Malaysian families can buy items up to 20 per cent cheaper than the market prices, supported by a price subsidy which involves an allocation of RM100 million;

– Local news channels on electronic media will continue inform the people about PJMKM to enable up-to-date information on premises, sale items and discounts offered; and

– Organising a low-cost sales program at public higher education institutions or [email protected] This program will involve collaboration with university cooperatives to enable students to get necessities at reasonable prices.

In addition, the Government will also continue to focus on strengthening the country’s food security.

In light of this, the Economy Planning Unit, The Prime Minister’s Department and the Ministry of Agriculture and Food Industry will carry out a study to identify ‘quick wins’ in addressing national food security issues and challenges. The research is expected to be completed within three months.

This is in support of the ongoing comprehensive study conducted by the Ministry of Agriculture and Food Industry on strengthening and sustaining the country’s long-term food security ecosystem over a period of 10 years.

“Efforts taken by the Government have resulted in stable prices, mainly for cooking oil, chicken and eggs. The government will continue to take steps to curb inflation, and with such measures, inflation is deemed to be under control,” he added.

Following the Minster’s statement, The Department of Statistics Malaysia released the Consumer Price Index Malaysia report for August 2022 today, as follows:

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