PRICES paid by consumers in Malaysia may fall in October 2008 and are likely to continue going downwards in the months ahead.
Price reduction campaigns in hypermarkets and other retail outlets will help contain the rise in food prices, economists said.
The government also reduced pump prices for petrol and diesel by 15 sen yesterday and assured bus commuters that it would not consider the 100 per cent increase proposed by the operators.
A Business Times poll of economists expect the consumer price index (CPI) to post an average growth of 7.82 per cent year-on-year.
The CPI in September grew at 8.2 per cent, impacted by the price rise for food, non-alcoholic beverages, tobacco and transport services as well as housing expenditure.
The Statistics Department will announce the latest CPI figures on Friday.
TA Enterprise economist Patricia Oh said the CPI for October would remain elevated as consumer prices are still on the way down.
"However, with the government's pressure on the supermarkets and grocery stores to reduce prices following the downward revision on fuel prices, we expect the index for food and non-alcoholic beverages to actually ease slightly.
"In contrast, the sudden rise in the alcoholic beverages and tobacco index in September due to an increase in excise duty on tobacco products would result in higher price index for these product items for October and the subsequent months ahead," she said.
The local brokerage firm expects the CPI to register an annual growth of six per cent this year, down to a low of two per cent to 2.5 per cent in 2009.
Citi Asia Pacific economics and market analysis vice-president Kit Wei Zheng said the CPI for October is expected to remain high largely due to effects from the hike in electricity tariffs in early July.
The inflation level is set to moderate substantially going forward.
"The recent fall in crude oil prices could also provide some relief for headline inflation in the second half of 2008," he said.
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