June CPI rises 3.4% on-year, slightly below forecast

Transport cost, rising 16.6%, was the main driver for the increase in June's CPI.

KUALA LUMPUR: The country’s inflation rate, as measured by the Consumer Price Index (CPI), rose by 3.4% in June, due to higher fuel prices when compared with a year ago, but the increase was lower than a survey of 3.5%.

Thirteen economists polled by Reuters had forecast the index to increase 3.5% year-on-year. The index in April rose at its fastest pace in four years.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said on Friday the CPI rose by 3.4% in June to 123.2 when compared with 119.1 a year ago.

“CPI remained positive for the fifth consecutive month since February 2021 due to the lower base effect last year as a result of the decline in fuel prices for private vehicles,” he said.

Transport group (16.6%) was the main contributor to the increase in the headline inflation. This was followed by housing, water, electricity, gas & other fuels (3.2%); furnishings, household equipment & routine household maintenance (2%) and food & non-alcoholic beverages (1.3%), he said.

On a monthly basis, CPI increased by 0.1% as compared to May 2021 due to food & non-alcoholic beverages (0.3%) and miscellaneous goods & services (0.1%).

“This slow momentum was due to the implementation of Movement Control Order (MCO) 3.0 and operations closure for non-essential sectors throughout June 2021 has eased the inflation pressures,” he said.

As for the second quarter, the CPI rose by 4.1% to 123.1 as compared to 118.2 a year ago. On a quarterly basis, the CPI increased by 0.5% from the first quarter.

Mohd Uzir said core index rose by 0.7% in June from a year ago, mainly due to housing, water, electricity, gas & other fuels (3.2%); furnishings, household equipment & routine household maintenance (2%); food & non-alcoholic beverages (1.3%) and transport (1%).

The other sectors which showed slight increases were recreation services; health; education; restaurants & hotels and miscellaneous goods & services (0.3%).

“Core index excludes most volatile items of fresh food as well as administered prices of goods and services,” he said.

The CPI without fuel increased by 1.5% in June 2021. This covers all goods and services except unleaded petrol RON95, unleaded petrol RON97 and diesel.

He pointed out seven states surpassed the national CPI rate of 3.4% in June were Terengganu (4.4%), Kelantan (4.1%), Pahang (3.9%), Perak (3.6%), Selangor & Putrajaya (3.5%), Negeri Sembilan (3.5%) and Kedah & Perlis (3.5%).

All states registered an increase in the index of food & non-alcoholic beverages with Terengganu recording the highest at 2%; Selangor & Putrajaya (1.9%), Kelantan (1.7%) and Kuala Lumpur (1.4%).

June CPI rose 3.4%, lower than a survey of a 3.5% increase.June CPI rose 3.4%, lower than a survey of a 3.5% increase.

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