Selangor Journal

Research firm predicts inflation on the rise in 2017

SHAH ALAM, DEC 27: Research firm Nomura Research expects inflation in Malaysia to increase as high as 2.8% in 2017, compared to a 2.1% average increase in 10 months in 2016.
The Edge Markets reported that the increase is due to price increases generated by the continuous weakening of the ringgit.
“As Malaysians are welcoming 2017, they face a weak ringgit and food prices which are increasingly expensive. Consumer expenditure will decrease as imported goods become more expensive, increasing the inflation.
“It is mainly driven by the effects of fuel prices,” said Nomura Research.
The ringgit value is at its worst since 1998, plunging to RM4.4810 against USD1 on December 19.
Earlier, Former Bank Negara Malaysia (BNM) Deputy Governor Dr Rosli Yaakob said that if the ringgit continues to decline, it may reach up to RM5 to USD1 in 2017.
He said that increasing national debt without strict control is also causing the ringgit to decline as debt repayments are only accepted in foreign currency such as the US Dollar.
He said the market price of local and imported vehicles are expected to increase by 5-10% next year caused by the continuous depreciating trend of the ringgit.
Consumer Price Index (CPI) as a whole, increased by 1.8% in November 2016 to 116.9, compared to 114.8 in the same month last year.
Based on seasonal adjustment terms, CPI for November 2016 rose by 1.0% compared to October 2016.
Out-of-home food index continued to rise in November 2016 with a 3.4% increase.
Among food indexes showing notable increase in November 2016 compared to the same period in the previous year are cooking oil (+45.6%); chicken (+10.0%); squid (+7.8%); Spanish Mackerel (+7.2%); mackerel (+5.4%); prawn (+4.8%) dan Red Snapper (+4.5%).
Meanwhile, several food group indexes showed a decline such as carrot (-9.2%); red onion (-7.5%) and tomato (-3.6%).

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