Malaysia’s inflation rate fell 0.2% in March

by NUR HANANI AZMAN/ pic by RAZAK GHAZALI

MALAYSIA’S inflation as measured by the Consumer Price Index (CPI) fell 0.2% year-on-year (YoY) to 120.9 points in March from 121.1 points a year ago, as fuel costs fell in line with the plunge in global oil prices.

The index of transport, which contributed 14.6% of overall weight, declined 8.9%. However, the fall was countered by increases in the indexes of housing, water, electricity, gas and other fuels (1.6%), and food and non-alcoholic beverage (1.2%).

The lower average price of RON95 in March of RM1.74 per litre versus RM2.08 a year ago also contributed to the decrease of the transport and overall index, the Department of Statistics Malaysia (DoSM) said yesterday.

The average price of RON97 decreased to RM2.04 per litre from RM2.51 the year earlier, while diesel declined to RM1.89 per litre from RM2.18 in the preceding year.

The last time the CPI fell was in February last year, when it slid 0.4% on lower transport costs. Inflation rose 1.3% and 1.6% in February and March 2020 respectively.

Food and non-alcoholic beverage, which increased 1.2% to 134.1 points in March, contributed to 29.5% of CPI weight.

Miscellaneous goods and services climbed 2.6%, followed by housing, water, electricity, gas and other fuels (1.6%), communications (1.5%), health (1.4%) and education (1.3%).

“Out of 552 items covered in the CPI, the prices of 337 items increased in March 2020 compared to March 2019. On the contrary, 163 items declined, while 52 items were unchanged,” DoSM chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in a statement.

By category of goods and services, non-durable goods (296 items) experienced the biggest jump in prices as the prices of 195 items rose, 84 items decreased and 17 items were unchanged compared to services, semi-durable goods and durable goods.

On a monthly basis, the CPI decreased 1.2% from February due to an 8.7% drop in transport and a 0.2% fall in restaurants and hotels.

Meanwhile, CPI in the first quarter of 2020 (1Q20) rose 0.9% to 121.9 from 120.8 in the same quarter last year. On a quarterly basis, the CPI was down 0.2% from 4Q19.

Last month, the indexes for all states decreased between -0.1% and -0.9% from a year ago. However, Selangor and Putrajaya recorded a 0.3% increase, Kuala Lumpur climbed 0.2% and Pulau Pinang rose 0.1% YoY.

“All states registered an increase in the index of food and non-alcoholic beverage. The highest increase was recorded by Selangor, Putrajaya and Johor (1.8%), followed by Terengganu (1.6%). The increases surpassed the national index of 1.2% for food and non-alcoholic beverage in March,” DoSM said.

The overall inflation rate was in line with RAM Rating Services Bhd’s (RAM Ratings) forecast of 0.2% for March. The rating agency had said it expected the decline due to weak oil prices, which hit 20-year lows.

RAM Ratings also slashed its full-year headline inflation forecast to 0% from 0.7% previously on weak global oil prices, generous discounts for household electricity bills and subdued demand.