Selangor Journal

RAM: Inflation projected at 4.4% in April

KUALA LUMPUR, MAY 17: RAM Ratings has projected inflation in Malaysia to reduce to 4.4 percent in April 2017, compared to 5.1 percent in March due to reduction in the effect from a low base for transportation fuel group.
In the Economic Insight inaugural publication, the rating agency said transportation fuel is a significant contributor to the increase in core inflation in the first quarter of this year.
RAM Ratings said the volatile upward trend of food and non-alcoholic beverages prices also affect the pressure on prices this year, following the abolition of cooking oil subsidy in November 2016, and the increase in the price of fish, seafood, vegetables and outside food.
“The outside food inflation remains as the main driver of price increase for non-alcoholic beverages and food as a whole, given a weightage of 36.8 percent based on Consumer Price Index (CPI),” according to the agency as reported by BERNAMA.
RAM Ratings, which maintains its CPI annual forcast at 3.0 percent, however, admitted that the upward pressure will fundamentally affect the outlook, mainly from the flow of fuel prices.
“We will monitor the impact of all factors, including expectations of continued reduction of oil production by the Organization of Petroleum, besides the speed and sustainability of the shale oil production, in addition to potential supply shock in the event of an increase in geopolitical risks,” the agency said.

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