KUALA LUMPUR, Oct 7 — MIDF Research has predicted the consumer price index (CPI) inflation will moderate to 3.0 per cent this year from 3.3 per cent in 2022.
The research house said the softer inflation as reflected in the services producer price index (SPPI) along with the continued decline in producer price index (PPI) for goods-producing industries at -1.4 per cent year-on-year (y-o-y) in the third quarter (3Q) (second quarter: -4.1 per cent) pointed to easing cost pressures which led to the continued moderation in CPI inflation.
“However, we are still concerned about food inflation as shown by the continued cost increases in the food and beverage (F&B) services, which was the main contributor to the sequential rise in the overall services PPI from the previous quarter.
“While the easing cost pressures have resulted in moderating inflation, we foresee a renewed rise in cost pressures could lead to re-acceleration in consumer price inflation in the coming months,” it said in a research note today.
Yesterday, the Department of Statistics Malaysia reported a 1.4 per cent rise in the SPPI for the 3Q 2023 amid increases in all subsectors except the index of information and communication.
MIDF Research said the figure, down from 2.7 per cent in 2Q 2023, marked the slowest increase in six quarters.
The moderation was mainly underpinned by the deceleration in the production cost for transportation services, which grew at a slower pace of 0.7 per cent y-o-y against 4.8 per cent in 2Q 2023, mainly attributable to slower inflation in the air transport services.
Moreover, the PPI inflation for accommodation and F&B services also eased to 4.6 per cent y-o-y (2Q 2023: 6.3 per cent), while the PPI for health services and professional services recorded a slight moderation to 0.2 per cent y-o-y (2Q 2023: 0.3 per cent) and 0.4 per cent y-o-y (2Q 2023: 0.5 per cent) respectively.
It added the production cost inflation for education services was unchanged at 1.0 per cent y-o-y but for real estate activities, the cost inflation rebounded to 0.2 per cent y-o-y after deflating 0.1 per cent y-o-y in 2Q 2023.
Information and communication, which accounted for the biggest weight or 39.6 per cent of the index, registered no inflation for the 10th consecutive quarter in 3Q 2023.
Against the previous quarter, the SPPI grew quicker at 0.4 per cent quarter-on-quarter (q-o-q) (2Q 2023: 0.2 per cent q-o-q), mainly reflective of the faster cost increases in accommodation and F&B services as well as arts, entertainment and recreation, MIDF Research said.
— Bernama
