In the environment of elevated global commodity prices, inflationary pressure in Malaysia is affected via higher food inflation, analysts observed. — Photo by Chimon Upon
KUCHING: In the environment of elevated global commodity prices, inflationary pressure in Malaysia is affected via higher food inflation, analysts note.
The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) recapped that Malaysia’s food inflation edged up to 7.1 per cent year on year (y-o-y), 0.1 percentage points lower than the record high.
MIDF Research expects food price growth to record at 5.5 per cent this year among others attributed by further depreciation of US dollar-ringgit.
“With domestic demand firming, we upgrade our headline CPI forecast slightly by 0.2 per cent point to three per cent for 2022,” MIDF Research said.
“Moving into 2023, supply-push factors on inflation are expected to soften among others underpin by appreciation of US dollar-ringgit, moderation in food prices, further easing in global supply chain pressure and normalising commodity prices.
“Thanks to 15th General Election (GE15), Malaysia’s inflation outlook is much clearer for next year as we expect the newly-formed unity government is very likely to keep current fuel-subsidy mechanism status quo.
“As guided by Pakatan Harapan (PH) manifesto blueprint, the PH-led government may review monopoly practices on several agriculture-related items with the idea to increase output supply and lower food prices.”
The research arm noted that if status quo on the fuel subsidy, hence headline inflation is predicted to hover between 2.3 to 2.5 per cent for 2023.