Value controls in place to tame inflation

KUALA LUMPUR: Inflation seems to be partially mitigated because of the worth intervention measures by the federal government for retail petrol and meals costs, however vigilance ought to nonetheless be on a excessive degree.

Whereas larger world power costs have contributed considerably to inflation in lots of nations, the direct affect has been considerably contained in Malaysia, in keeping with the Financial institution Negara 2021 financial, financial and monetary developments report.

“This is because of worth interventions, particularly worth controls on retail gasoline and electrical energy tariff laws, which have mitigated the affect on client costs regardless of the surging world crude oil and coal costs.

“Just lately, worth controls on key meals objects have additional alleviated worth pressures for the shoppers,” it stated.

It additionally famous that whereas transport prices have risen globally, the severity has been much less pronounced in regional Asian economies together with Malaysia.

“Value will increase on regional Asian economies have been comparatively contained, partly reflecting the proximity to the worldwide manufacturing hub,” it stated.

Transport value will increase are primarily seen within the sharp rebound in import demand from the USA, in keeping with Financial institution Negara.

“Such a surge in demand has put an upward stress on prices.

“The transport value from China to Europe and South America has quadrupled in 2021,” it stated.

Whereas inflationary pressures are anticipated to stay manageable within the nation transferring ahead, it stated excessive vigilance is required as inflation might have some upward pressures.

“The vulnerability stays, particularly given current geopolitical developments,” it stated.

Some important meals objects, together with recent meat, are Covid-sensitive and will see bigger worth pressures that might result in unfavourable penalties to the price of dwelling issue, in keeping with the central financial institution.

Companies are growing costs in anticipation or larger inflation whereas staff are persistently demanding for larger wages to make up for the anticipated loss in buying energy, it stated.

“Nonetheless, this stays a tail danger. For 2022, whereas the inflation outlook is topic to upside dangers, the headline inflation is projected to stay manageable,” it added.


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