Inflation to be steady in August, up in September

by **Cals** Tue 17 Sep 2013, 11:49

Published: Tuesday September 17, 2013 MYT 12:00:00 AM
Updated: Tuesday September 17, 2013 MYT 7:05:59 AM
Inflation to be steady in August, up in September

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PETALING JAYA: Inflation is expected to pick up and be reflected in the consumer price index (CPI) from September onwards in the wake of the fuel price hike, economists said.
They said prices of consumer items should remain steady in August in the absence of seasonal factors. The Statistics Department would be releasing August CPI data tomorrow.
Economists in a survey expect the August CPI to increase a median 2% year-on-year, the same as July. The Government raised prices of both RON95 petrol and diesel by 20 sen to RM2.10 per litre and RM2 per litre respectively on Sept 1as part of moves to reduce fuel subsidies.
Economists expect that inflationary pressure would be reflected in the CPI in the coming months due to the September fuel price hike.
“We expect moderate cost pressure to continue in August before the uptick in inflation from September onwards,” AmResearch economist Patricia Oh said in a recent report.
“The cost component of transport contributes 14.9% to the basket of CPI. With the petrol pump price increase, the transport index is likely to register an increase of 3.2% this year versus the year-to-date growth of 0.5%,” she explained.
AmReseach had tweaked its full-year 2013 assumption for inflation higher to 2.2%, compared with an earlier estimate of 2%.
RHB Investment Bank Bhd, which had also revised full-year CPI estimate for Malaysia to 2.2% from an earlier estimate of 2%, said the impact of fuel price hike on inflation was expected to be one-off and the pass-through effect was not likely to be strong.
It expected Malaysia’s CPI to jump to 3% in September (from its earlier forecast of 2.1%), and continue to trend up and reach a high of 3.5% in December before tapering off.