Wednesday December 26, 2007

Fuel prices seen stoking Malaysia inflation in 2008

This article belongs to the Malaysia inflation watch story arc.

businesstimes.com.sg :

Malaysia's consumer price index (CPI) shows inflation hit a nine-month high in November [2007] and looks like it is accelerating. Figures released by the Statistics Department show November's inflation rate jumped to 2.3%, from 1.9% in October. The rise was driven largely by a 3.8% surge in the price of food and soft drinks - the biggest in two years and a direct result of the higher global prices of flour, cereal and dairy products. A Deutsche Bank survey two years ago calculated that the real rate of inflation in the Klang Valley was closer to 8%.

Inflation will gain impetus next year because of pending increases in the prices of fuel and public transport. Price rises could also put pressure on the government, which is likely to call a general election next year. Fuel prices will be a particularly tricky problem for the government. They are being reviewed, and while details so far have been sketchy, most analysts reckon fuel could go up by at least 20-30 sen (9-13 Singapore cents). The government has already announced toll rate hikes on six highways ranging from 9-50%. The upshot of all this, according to investment bank CIMB, is an inflation rate of 3.3-3.8% in 2008.

Updated :

1. Angry citizens protest as Malaysia eliminates subsidies, raising petrol prices 40% overnight
2. Malaysia petrol and diesel price hike to bite Singapore hard, worsening record inflation rate

(2007-12-26 19:16:51 SGT) [Biz] Permalink Comments [1]

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