MARC sees CPI at 5.8% this year

KUALA LUMPUR: Malaysian Rating Corporation Bhd (MARC) sees higher inflation ahead, fuelled by rising costs of food and fuel, and has raised its forecast for the average inflation rate of 5.8% for this year from the previous estimate of 5%.

The rating agency said on Friday that sharp increases in the sub-indices of transport and food and non-alcoholic beverages by 19.6% and 10% year-on-year were are expected to continue until year-end.

The factors for the rising inflationary pressure in the remaining part of the year would result from the fallout from rising cost of food and fuel.

While the consumer price index (CPI) has risen by an average rate of 3.7% in the first half, the CPI is expected to climb at a faster pace of 7.9% in the 2H2008, giving an average of 5.8% for the whole year.

MARC said the two major sub-indices, that would exert upward pressures on the overall CPI in the near term, would be food/non-alcoholic beverages and transport.

It added the higher-than-expected inflation in Malaysia and in the region as well as major developed countries in recent months; it expected an increasing risk of higher overnight policy rate (OPR) from the 3.5% now.

It said should the economy continue to post a higher-than-expected growth which would lead to a continuous rise in capacity utilisation of the manufacturing sector as well as emergence of demand-pull factors in the economy, a monetary policy response was expected in the near future.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Business News

Genetec 2Q net profit surges due to electric vehicle sector
Supermax warns US import ban could have significant earnings impact
Investors take to the sidelines ahead of Budget 2022
HSBC surprises with 74% rise in 3Q profit, announces $2 bln buyback
Evergrande, EV unit shares jump after chairman signals business shift
Ringgit falls on caution over Budget 2022
Hup Seng faces short-term downside pressure
Yinson sets up Islamic MTN programme up to RM1b
Bursa sees third straight week of foreign buying
Quick take: KNM rises 2.27% on RM111mil purchase order

Others Also Read