by AZALEA AZUAR / pic TMR FILE
CONTROLLING the prices of selected goods and services will avoid hyperinflation as well as maintain the current fiscal policy and monetary policy.
The Finance Ministry (MoF) said in Dewan Negara today that various measures have been implemented to control the increase in the price of basic goods and services, including the implementation of selected food price subsidies as well as electricity rebates for domestic consumers.
According to the ministry, these initiatives will help to moderate the country’s inflation rate compared to other nations.
Hyperinflation is a situation where the inflation rate remains at a very high level month by month. It can erode a country’s currency value.
Malaysia has recorded an inflation rate of 3.4% in June 2022.
This is driven by food and non-alcoholic beverages (6.1%), transportation (5.4%) and restaurants and hotels (5%).
In the same month, inflation rates in several developed and regional countries such as the US and the UK exceeded 9%, Thailand exceeded 7% and Singapore and the Philippines exceeded 6%, according to the ministry.
Since the end of March this year, Brent crude oil prices have remained above US$100 (RM446) per barrel and this, along with supply chain disruptions on fertilisers and fodder have caused food security issues. In turn, these are all inflationary pressures.
Therefore, the rising prices of goods (especially for finished products and imported intermediate goods) will be difficult to be completely avoided until these pressures stabilise.
“Nevertheless, the government is always concerned about the increase in the rate of inflation which causes anxiety among the people and businesses and continues to monitor the current global economic development,” the MoF added.