Economic Update - Consumer Price Index (CPI) – September 2012

Economic Update - Consumer Price Index (CPI) – September 2012

Above expectation – Consumer Price Index (CPI) for
September continued to ease by 1.3% y-o-y and 0.2% mo-
m respectively to 105.2. Such results are slightly above
our forecast for September 2012.

The decrease in yearly CPI is attributed to the decline in
communication and clothing and footwear, both shrank to
0.7%, which account for 3.4% and 5.7% of total
weightage CPI.


Unchanged m-o-m CPI – For two consecutive months,
monthly CPI figures remained the same at 0.2% as the
Food at Home index (108.0) and the Housing, Water,
Electricity, Gas and Other Fuel index (103.8) stayed
unchanged.
The government kept tariff at the old rate despite
increasing cost operation by Tenaga Nasional Berhad
(TNB). This kept the Housing, Water, Electricity, Gas and
Other Fuel index at 103.8.

Expensive distillate, a substitute for gas, has dragged
down TNB’s financial position into the red. As a solution,
electricity producers proposed an upward tariff revision to
the government. However, the government has not given
the green light as it will bring financial burden to the low
income group and followed by increased price in goods
and services.

Unchanged Food & Non-Alcoholic Beverages
indices - Food Take Away index rose by 0.1% m-o-m and
Coffee, Tea, Cocoa & Non-Alcohol Beverages index up
0.3% m-o-m. This has been offset by unchanged food
index and thus, resulted in unchanged Food & Non-
Alcoholic Beverages index at 108.0.
CPI is likely to remain stagnant – Following the
absence of upward revision of tariff rate for Electricity,
Gas & Other Fuels at this moment, we expect CPI rate to
remain at bay, ranging between 1.3 to 1.5% for
September 2012.