Thursday, July 24, 2008

Malaysian inflation hits 26-year high

Malaysia's annual inflation rate jumped to a 26-year high of 7.7 percent in June due to a substantial rise in fuel prices, according to official data released Wednesday.

Nor Mohamed Yakcop, second finance minister, had said that a 41-percent hike in subsidised fuel prices last month was set to boost inflation in June and July.

But he insisted that inflation for 2008 would be contained at five percent.

The figure came as something of a surprise, as economists had predicted June inflation of 6.6 percent.

Economists now expect the central bank to raise interest rates by 25 basis points at the end of July to counter the jump in inflation.

Malaysia's key interest rate now stands at 3.50 percent.

Transport prices rose 19.6 percent in June as compared with a year ago, while food and non-alcoholic beverages rose 10 percent.

In the first half of the year, consumer prices rose 3.7 percent from the same period the year before.

Prime Minister Abdullah Ahmad Badawi last month announced a deeply unpopular 41 percent increase in petrol prices to cut the country's subsidies bill, which would have reached 17 billion dollars this year.


2 comments:

Anonymous said...

Predictable...huh?!

Anonymous said...

Assalamua'laikum, Dear Azuriy,
Sorry to ask one stupid question; What does the report means? Is that very soon, the price of other items will be more expansive?
Wassalam.