BY: NAZLI IBRAHIM
SHAH ALAM, FEB 22: The citizens’ spending power continue to decline with the increase in inflation rate in 2016, from 1.3 percent in the third quarter to 1.7 percent in the fourth quarter.
Former Bank Negara Malaysia (BNM) Deputy Director, Dr Rosli Yaakob said, the inflation rate increases in the recent years were due to several decisions taken by the government which were not in favour of the citizens.
“In the year before, the inflation rate increase was mostly due to Goods and Service Tax (GST) implementation and last year, it was influenced by the move to increase petrol and diesel prices, which showed that it did not occur naturally but was triggered by the government itself,” he said when contacted by SelangorKini.
He said, besides GST, the Federal Government’s move to increase petrol and diesel prices has also caused a chain-reaction to the increase in prices for other consumer goods.
Inflation rate increase is considered normal if it is influenced by demand in the market which has increased due to the increase in citizens’ wages or income, he stated.
He added that, inflation rate increase is felt more when salary increase is low or none at all, which is happening more in the private sector.
Besides salaries which have reached a plateau, employees in companies which are retrenching workers are affected the most, he stated.
Federal Government’s policy is the cause of inflation
