Our inflation rate used to be the lowest in the region if we used the official value of 2.8 percent. After the fuel price increase and its domino effect across the consumer sector, it was estimated that inflation will double to about 6%. Warning came in the form of May’s inflation which was 3.8% and some like Aseambankers expected it to be between 7.5 and 8 percent for the period July to December.
Today’s major headlines brought the bad news – 7.7 percent for June, and its expected to be the same in July due to increase in electricity tariff. This value is a 27-year high, since 1981’s 10.8 percent.
The substantial rise in the price of petrol and diesel announced by the
Government beginning June 5 is the main reason for the surge, said
Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad.
Other figures announced by the minister:
- CPI for January to June this year had also increased by 3.7% compared
with the same period last year, which was from 105.1 to 109. - Index for food and non-alcoholic beverages for June compared to the
same month last year showed high percentage change of 10.0% while the
index for non-food increased by 6.7%. - From January to June,
index for food and non-alcoholic beverages increased by 6.1% and
non-food 2.6%, while among the groups with high weights were transport
(+4%), and housing, water, electricity, gas and other fuels (+ 1.4%). - The
6.1% increase in the index for food and non-alcoholic beverages was the
result of increases in the index for items such as milk, cheese, eggs,
rice, bread, cereals, meat, vegetables, seafood, fruits, sugar, jam,
honey, chocolate, confectionary and fats. - Among the food items
that recorded notable increase in the June index were tomatoes, chicken
eggs, rice, glutinous rice, imported beef, beehoon, dried noodles,
watermelon, carrots, chicken and wheat flour.