KUALA LUMPUR, Aug 19, 2015:
Malaysia’s inflation rate accelerated more than expected in July to 3.3% from a year earlier as prices rose during Ramadan and the subsequent Eid al-Fitr celebrations.
A weaker ringgit, which has lost over 14% of its value against the US dollar so far this year, also boosted prices of imports.
Economists polled by Reuters had expected the consumer price index (CPI) to rise 2.9% in July from 2.5% in June.
Higher tobacco prices accounted for most of the pick-up in July inflation, statistics department data showed today.
Household expenditure also has climbed since the introduction of a 6% consumption tax in April, with price increases affecting consumers dining out, household goods such as furnishing as well as healthcare.
Domestic consumption grew at a slower pace in the second quarter this year, and economists expect consumers to continue tightening purse strings well into the third quarter as price increases show little sign of abating.
Energy prices may “rebound by the end of the year”, said Jeff Ng, economist at Standard Chartered, which would deflect price “retracement after the Ramadan season”.
Earlier this year, Malaysia’s inflation declined when oil and gas prices fell before spiking from February’s five-year low of 0.1% after the consumption tax was implemented.
Source - reuters
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