PETALING JAYA: Economists say there is no risk of deflation in Malaysia despite a declining producer price index (PPI) because consumption has not fallen dramatically but only moderated while prices of food, as reflected in the consumer price index, are not coming off fast enough.
Bank Negara, in its statement last week on monetary and financial developments for December 2008, said the PPI turned negative in November, declining to minus 0.2% with inflation in the commodity-based component of the index falling to minus 2.3%.
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