July inflation rate climbs on higher fuel prices

Higher pump prices pushed the inflation rate higher in July.

KUALA LUMPUR: Higher fuel prices pushed the Consumer Price Index (CPI) higher in July, a straight six-month rise but the monthly electricity bill discount given to domestic consumers helped mitigate the overall increase.

The Statistics Department said on Wednesday the CPI rose by 2.2% to 122.5 from 119.9 a year ago due to the lower base effect then.

The electricity bill discount was under the National People’s Well-Being and Economic Recovery Package (Pemulih) for three months effective July 1. However, the discounts were not enough to offset the impact of the increases of the petrol & diesel prices in July 2021 as compared to a year ago.

Chief Statistician Malaysia, Datuk Seri Dr Mohd Uzir Mahidin said the July CPI remained positive for the sixth consecutive months since February 2021 due to the lower base effect last year.

“The increase was mainly driven by a double-digit increase of 11.6% in the transport group due to the setting of the RON95 petrol ceiling price to RM2.05 per litre since March as compared to the average price of RM1.69 in July 2020.

“This was followed by furnishings, household equipment & routine household maintenance (1.7%); food & non-alcoholic beverages (1.3%) and housing, water, electricity, gas & other fuels (0.7%),” he said.

The CPI for January to July 2021 increased by 2.3% from the previous corresponding period.

However, the July CPI, when compared to June, decreased by 0.6%.

due to the decline in housing, water, electricity, gas & other fuels (-2.5%) and alcoholic beverages & tobacco (-0.1%).

Mohd Uzir Mahidin also said the July core index rose 0.7% on-year due to higher costs of furnishings, household equipment & routine household maintenance (1.7%); food & non-alcoholic beverages (1.1%) and transport (%).

Core index covers all goods and services except volatile items of fresh food as well as administered prices.

The CPI without fuel increased by 0.8% in July 2021 to 113.2 from 112.3 a year ago. CPI without fuel covers all goods and services except unleaded petrol RON95, unleaded petrol RON97 and diesel.

The Statistics Department pointed out five states recorded higher inflation rate when compared with the national rate of 2.2% in July.

The states are Terengganu (2.8%), Pahang (2.5%), Selangor & Putrajaya (2.4%), Kelantan (2.4%) and Sarawak (2.3%) due to higher costs of food & non-alcoholic beverages.

Infographic of the CPI for July.