By DASHVEENJIT KAUR / Pic By TMR
Malaysia’s economy continues to show signs of a deflationary trend as the Consumer Price Index (CPI) decreased 0.4% year-on-year (YoY) in February, a slower rate than in
According to a statement by the Department of Statistics Malaysia, last month’s index number stood at 120.8 compared to 121.3 recorded in February 2018.
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the continued fall in CPI was due to the 6.8% drop in the transport component, a segment that contributes 14.6% of overall index weight.
The decline, however, was negated by the increase in the index of housing, water, electricity, gas and other fuels (2%), and food and non-alcoholic beverages (1%).
In January, Malaysia’s CPI turned negative for the first time since November 2009, decreasing 0.7% YoY.
“On a monthly basis, CPI increased 0.2% compared to January 2019 which recorded an index of 120.5,” Mohd Uzir said.
The food and non-alcoholic beverages component of CPI continued to increase in February by 1% to 133.1 compared to 131.8 in the corresponding month of the preceding year. The segment contributes 29.5% of the CPI weights.
The increase in the index of food and non-alcoholic beverages was registered in most states in Malaysia — with Kuala Lumpur (KL) up 3.7%, and Selangor and Putrajaya, 1.3%.
“This indicated an increase above the national index level in February 2019 compared to the corresponding month in 2018,” he said.
The restaurants and hotels; education; as well as alcoholic beverages and tobacco segments also showed an increase by 1.3%, 1.3% and 1.1% respectively.
In terms of CPI by states, all states recorded a decrease of between 0.2% and 1.4% in February 2019 compared to the same month a year ago.
However, KL and Penang showed an increase of 0.3% and 0.2% respectively.
Bank Negara Malaysia said last week that Malaysia is not at risk of deflationary pressure.
“Headline inflation, which came in at 1% in 2018, is likely to average higher this year,” the central bank stated.
Standard Chartered — in a note ahead of the CPI data— said inflation remains distorted by administrative measures, and expects the central bank to focus on growth for its monetary policy decision-making.