Malaysia’s inflation rate in July 2023 continues to moderate to 2.0% compared to 2.4% in June 2023, marking an 11-month decline.
“The July 2023 inflation rate is the lowest inflation rate in a year, reflecting the ongoing stable price trend. The Food and Non-Alcoholic Beverages category accounted for the biggest change in inflation, at a rate of 4.4%,” said Economy Minister Rafizi Ramli.
On the positive side, the inflation rate for Food and Non-Alcoholic Beverages fell by almost 3.0% from 6.8% in December 2022 to 4.4% in July 2023.
Controlling the inflation rate is one of the government’s priorities, to ensure that runaway inflation, or inflation that increases drastically and uncontrollably, does not occur.
A high rate of inflation will continuously erode the people’s purchasing power, because the prices of goods and services will rise but incomes will not necessarily rise at the same rate.
“This means that people will face difficulties in meeting their basic needs, let alone to save or to invest. The economic power of the people will be affected, leading to potential social instability,” said Rafizi.
As a proactive measure, a policy paper is being developed to study and aims to reduce Approved Permit (AP) and Import Permit (IP).
“This policy paper is expected to be presented at the Majlis Tindakan Ekonomi Negara (MTEN) soon,” he added.
By reducing or limiting AP and IP, the government hopes this will lower the price of goods, especially imported goods. This will directly help increase the purchasing power of the people and alleviate the effects of inflation.
According to Rafizi, there is also room to improve anti-monopoly regulations and competition to ensure a more competitive market. By increasing competition, the prices of goods and services will become more affordable.
Controlling inflation and increasing the people’s purchasing power are critical components of the MADANI Economy. This approach will be implemented in an inclusive, effective, and sustainable way to ensure the well-being of the people.
