CPI jumps to 2.6pc in Sept
KUALA LUMPUR: The Consumer Price Index (CPI) in Malaysia jumped to a 20-month high of 2.6 per cent in September following the hike in pump prices.
The fuel-price hikes had spillover effects on other goods and services, with some business operators already passing on their increased costs to consumers.
CIMB Investment Bank expects inflation to edge higher, albeit gradually, potentially taking 2013 inflation to 2.2 per cent and 2.4-2.8 per cent in 2014, with further subsidy cuts coming up.
“Price pressures from subsidy cuts could continue as some price-increase proposals (for express and school buses) are still pending approval from the government. Subsidies for fuel could be cut again.
“The 2014 budget announced the abolishment of sugar subsidy of 34 sen effective 26 October. We keep our 2013 inflation estimate of 2.2 per cent and 2.4-2.8 per cent for 2014,” commented chief economist Lee Heng Guie.
For September, core inflation, which excludes volatile fuel and food, held steady at 1.1 per cent.
The growth in CPI was led by transport price inflation of 4.6 per cent (0.6 per cent in August), fuelled by a 20-sen price increase each for RON95 petrol and diesel on September 3, a 15-sen price hike for RON97 petrol on September 4 and 5.0-15 per cent chain price increases in commercial transportation.
Food prices also rose from costlier meat, vegetables and fish and seafood.
“Food prices should stay elevated on the back of year-end festive demand, supply shortages during the rainy season and subsidy cuts for sugar.”
Alcoholic beverage and tobacco price inflation edged higher to 4.5 per cent from 4.1 per cent in August following a 14 per cent hike in tobacco excise duties on September 30.