KUALA LUMPUR, Oct 27 — MIDF Research foresees limited pressure on local producers to increase selling prices going forward, given the Producer Price Index (PPI) inflation still remains below the Consumer Price Index (CPI) inflation.
The research firm, however, expects elevated commodity prices to continue to influence cost pressures in the primary sectors and prices of crude materials.
“Moreover, we opine that the effects from the weak ringgit and inflation in global food prices would also lead to stronger imported inflation in the coming months.
“In view of easing inflation and moderate growth, we expect Bank Negara Malaysia to keep the overnight policy rate unchanged at 3.0 per cent for now with greater emphasis on sustaining the economic growth,” it said in a note.
Malaysia’s producer prices registered the first inflation in eight months, rising by 0.2 per cent year-on-year (y-o-y) in September 2023, underpinned by PPI inflation in the mining sector, which rose at 6.9 per cent y-o-y, the sector’s first inflation for the year.
Similarly it said, production costs also pivoted to inflation for agriculture, forestry & fishing as well as electricity, gas & water supply.
“In contrast, the cost of production for the manufacturing sector, the largest component in the index, continued to decline by 0.8 per cent y-o-y, but was the slowest decline in the five-month contraction,” it added.
— Bernama
