Malaysia’s Inflation Up 2.5% In June Due To GST And Weak Ringgit

Malaysia’s Inflation Up 2.5% In June Due To GST And Weak Ringgit

Malaysia’s consumer prices rose in June following an increase in petrol prices. The implementation of the goods and services tax (GST) and a weaker Ringgit also contributed to inflationary pressure.

Data from the Statistics Department showed that the consumer price index (CPI), which measures headline inflation, showed a 2.5% increase in June compared with the same period in 2014, with food and non-alcoholic beverages contributing to the bulk of the rise in index.

The 2.5% rise was slightly higher than the forecasted increase of 2.4%.  In the first-half of 2015, inflation averaged 1.4%, primarily due to lower petrol prices.

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Economists say the rising inflation was due to the hike in petrol price from June 1, when RON95 and RON97 petrol saw a 10 sen increase to RM2.05 and RM2.35 respectively.

Most do not expect Bank Negara to raise benchmark interest rates in September when the monetary policy committee meets.

[Source]

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