World Economic outlook - Malaysia consumer price inflation january 2012 : Malaysia's consumer price inflation slowed to 2.7 percent in January from 3 percent in December, the Department of Statistics said on Wednesday - in line with expectations. On a monthly basis, consumer prices increased 0.3 percent during the month, following the previous month's 0.1 percent rise.
Judging from how consumer prices moved early this year, the chances of interest rates being lowered seem remote.
January's inflation as measured by the consumer price index rose 2.7% compared with a year ago due to increases in the prices of food and non-alcoholic beverages with the rate of inflation as low as a year ago.
The year-on-year increase was in line with the median estimates in a Bloomberg survey of economists and showed a further moderation in overall inflation after a 3% rise in December.
Data from the Statistics Department showed prices climbed 0.3% compared with the previous month largely due to a 0.8% increase in the prices of food and non-alcoholic beverages, whereas the prices of non-food items remained unchanged.
Although opinion among economists was previously split on whether there would be a loosening of monetary policy by Bank Negara this year, the possibility of a cut in the benchmark overnight policy rate (OPR), which stands at 3%, would now be slimmer.
Most pointed out that rates were still accommodative to growth, following the release of the fourth quarter 2011 and full-year gross domestic product (GDP) data.
Manokaran Mottain told StarBiz that the rate of inflation was now lower than the OPR for the first time in 12 months.
But he did not discount inflation picking up again towards the end of the year as the demand for oil and other commodities picked up on a recovery in global growth.
“There will be no urgent need for an easing of monetary policy when the central bank meets next month,” he said.
Citigroup Inc senior economist Kit Wei Zheng said in a report on Feb 15 that the central bank would likely stand pat on the OPR this year since costs and availability of credit was not a constraint.
Also, the emergency conditions that triggered the 2008/2009 rate cuts were not present.
He said the house was sticking to a GDP growth of 5% versus a consensus of 3.8% this year since Government spending on development should imply a slight pick-up from the second quarter.
Besides food and non-alcoholic beverages, other contributors to the price increases on a year-on-year basis were housing, water, electricity, gas and other fuels (1.8%) and transport (1.6%).
Judging from how consumer prices moved early this year, the chances of interest rates being lowered seem remote.
January's inflation as measured by the consumer price index rose 2.7% compared with a year ago due to increases in the prices of food and non-alcoholic beverages with the rate of inflation as low as a year ago.
The year-on-year increase was in line with the median estimates in a Bloomberg survey of economists and showed a further moderation in overall inflation after a 3% rise in December.
Data from the Statistics Department showed prices climbed 0.3% compared with the previous month largely due to a 0.8% increase in the prices of food and non-alcoholic beverages, whereas the prices of non-food items remained unchanged.
Although opinion among economists was previously split on whether there would be a loosening of monetary policy by Bank Negara this year, the possibility of a cut in the benchmark overnight policy rate (OPR), which stands at 3%, would now be slimmer.
Most pointed out that rates were still accommodative to growth, following the release of the fourth quarter 2011 and full-year gross domestic product (GDP) data.
Manokaran Mottain told StarBiz that the rate of inflation was now lower than the OPR for the first time in 12 months.
But he did not discount inflation picking up again towards the end of the year as the demand for oil and other commodities picked up on a recovery in global growth.
“There will be no urgent need for an easing of monetary policy when the central bank meets next month,” he said.
Citigroup Inc senior economist Kit Wei Zheng said in a report on Feb 15 that the central bank would likely stand pat on the OPR this year since costs and availability of credit was not a constraint.
Also, the emergency conditions that triggered the 2008/2009 rate cuts were not present.
He said the house was sticking to a GDP growth of 5% versus a consensus of 3.8% this year since Government spending on development should imply a slight pick-up from the second quarter.
Besides food and non-alcoholic beverages, other contributors to the price increases on a year-on-year basis were housing, water, electricity, gas and other fuels (1.8%) and transport (1.6%).
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