October inflation rate lower

  • Business
  • Saturday, 22 Nov 2008

PETALING JAYA: Malaysia’s inflation rate, as measured by the consumer price index (CPI), rose 7.6% in October, down from 8.2% in September, according to data from the Statistics Department.

The decline followed a series of cuts in fuel prices since June.

Economists expect to see the inflaton rate making a bigger retreat going forward.

“We should see overall inflation easing more sharply and quickly in coming months,” said Ratings Agency Malaysia’s (RAM) chief economist, Dr Yeah Kim Leng.

He said the decline in the October CPI could have been bigger if not for the reluctance of most businesses to lower their prices although fuel prices had been reduced. From January to October, the CPI rose 5.5%.

The department said the retreat in the inflation rate in October was mainly due to price declines in the transportation sector, which slid 3.6%, and alcoholic beverages and tobacco, down 0.1%.

RAM’s Yeah said global inflation should be coming down quite sharply as well, as commodity prices, especially crude oil, have reverted to levels before their escalation.

He estimated CPI for this year at around 5.5% and below 3.5% in 2009.

Kenanga Research head of research Yeonzon Yeow said the easing of the inflation rate was within expectation. He estimated this year’s CPI at 6% and 3.5% next year.

For the full report from the Statistics Department click here

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