PETALING JAYA: Inflationary pressures continued to ease in November as transportation costs and prices of food and non-alcoholic beverages registered a slower increase on a year-on-year (y-o-y) basis.
As measured by the consumer price index (CPI), Malaysia’s headline inflation rose by 3.4% y-o-y last month, matching market consensus estimates.
In comparison, the CPI recorded a higher growth of 4.3% and 3.7% in September and October respectively.
According to the Statistics Department, transportation costs increased significantly by 10.8% y-o-y in November, after rising 12.1% in October.
“The average price of one litre of RON95 petrol was RM2.30 in November 2017 as compared to RM1.95 a year earlier.
“As for RON97, the average price increased to RM2.59 in November 2017 as compared to RM2.30 in November 2016. Fuels and lubricants for personal transport equipment accounted for 7.8% of the CPI weights,” it said.
On the other hand, slower increase in the prices of vegetables and meat last month led the food and non-alcoholic beverages index to grow at a slower pace of 4% y-o-y in November 2017.
In comparison, the index, which accounted for 30.2% in the CPI weights, grew by 4.4% y-o-y in October this year.
MIDF Research said in a report that the country’s food inflation remained above 4% for 11 consecutive months.
“The rebound in fresh seafood prices by 9.8% y-o-y is possibly due to lack of supply as monsoon season takes place during the month.
“For the final month of 2017, we view food inflation will stay above 4% due to unfavourable weather condition, long holidays, tourism activity and uptick in transportation cost,” it said.
Core inflation in November has also eased marginally as it rose by 2.2%, as compared to 2.3% in October this year. Note that core inflation excludes most volatile items of fresh food as well as administered prices of goods and services.
Geographical location-wise, Melaka recorded the highest headline inflation in November as prices rose by 3.8% y-o-y, supassing the national CPI level. Pahang, however, registered the lowest growth in CPI as inflation grew by 2.6% y-o-y.
For the period of January to November, overall inflation rose by 3.9% y-o-y mainly as a result of higher food and non-alcoholic beverages prices, which grew by 4.3% y-o-y. Apart from that, transportation costs were higher by 13.3% in the period.
Moving forward, MIDF Research expects December’s inflation rate to remain above 3%, with fuel-related items remain as dominant driving factors, primarily because high pass-through effects of rising global crude oil prices.
“We maintain our forecast of 3.8% for inflation in 2017. Among others, gradual rise in commodity prices, unfavourable weather effects, stable labour market and modest appreciation of ringgit are pushing factors on Malaysia’s inflation outlook for the fourth quarter this year,” said the research house.