Malaysia’s inflation down 2.9%, lowest in 10 years

The decrease in the CPI is driven by the decline in transport by -21.5% last month

by SHAHEERA AZNAM SHAH/ pic by MUHD AMIN NAHARUL

MALAYSIA’S Consumer Price Index (CPI) fell 2.9% to 117.6 points in April from 121.1 in the same month last year — the lowest level since 2010 — as low average crude oil prices dragged transport costs lower by 21.5%.

For the period of January to April 2020, the index — which is a measure of the country’s inflationary level — declined 0.1% compared to a year ago, according to data from the Department of Statistics Malaysia (DoSM).

“The decrease in the overall index was driven by the decline in transport (-21.5%), and housing, water, electricity, gas and other fuels (-2.2%) that contributed 14.6% and 23.8% of overall weight respectively,” DoSM chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in a statement yesterday.

The transport and overall indices fell as RON95 average price was lower at RM1.27 per litre in April 2020 against RM2.08 in April 2019. RON97 average price was also weaker at RM1.57 per litre versus RM2.71. Meanwhile, diesel slipped to RM1.49 per litre from RM2.18 a year ago.

However, food and non-alcoholic beverage — which contribute 29.5% of CPI weight — continued to rise in April with a 1.2% increase year-on-year (YoY) which was attributed to vegetables (3.5%), food products not elsewhere classified (2.8%) and meat (2.6%). Among the index of goods, which recorded price increases in most states, were small onions (36.4%), big onions (30.5%) and garlic (28.9%).

The index for food away from home jumped 1.5% YoY in April 2020, contributed by increases in the prices of nasi lemak, fried rice and cooked beef.

The overall CPI also decreased 2.7% from March 2020, mainly due to transport (-13.5%) and housing, water, electricity, gas and other fuels (-3.8%).

Headline inflation has been declining since March, when the CPI eased 0.2% — the first decline since February 2019 due to lower petrol prices.

Earlier this month, Bank Negara Malaysia said the country’s average headline inflation is expected to be in negative territory this year due to the anticipation of

lower global crude oil prices. The outlook for headline inflation could remain heavily impacted by global oil and other commodity prices, including food and changing demands, the central bank added.

For April 2020, the CPI fell between -2% and -3.9% across all states, led by Kedah and Perlis (-3.9%) and followed by Sarawak (-3.8%). Meanwhile, CPI for Sabah and Wilayah Persekutuan Labuan declined -3.7% each. In contrast, all states registered an increase in the index of food and non-alcoholic beverage.

“The highest increases were recorded by Selangor, Putrajaya, Perak and Terengganu, each at 1.8%. Followed by Johor (1.7%) and Penang (1.5%). The increases surpassed the national index of 1.2% for food and non-alcoholic beverage in April 2020,” Mohd Uzir said.

The core index rose 1.3% for the month, mainly influenced by the increases in miscellaneous goods and services, housing, water, electricity, gas and other fuels, as well as communication.

Core index excludes most volatile items of fresh food, as well as administered prices of goods and services.