Economists expect January CPI to ease, REALLY ???
By Rupa Damodaran
February 20 2007
INFLATION in Malaysia, trending downwards as the effects of last year's fuel price hike wear off, is expected to grow at 3.03 per cent year-on-year for January. A Business Times poll of 14 economists expects the consumer price index (CPI), the barometer of inflation, to trend downwards as global crude oil prices ease.
The Statistics Department is expected to release the data tomorrow. The CPI grew at its slowest pace in 16 months in December on reduced impact from a fuel hike imposed in March last year. The 3.1 per cent growth figure for the CPI in December brought full year 2006's inflation to 3.6 per cent.
Wan Suhaimi said inflationary pressures this year may further ease to below his 2.7 per cent year-on-year forecast for 2007.
The CPI for the whole of 2006 increased by 3.6 per cent to 103.6 from 100 in 2005, while the CPI for December increased to 104.6 from 101.5 in the same period in 2005.
The inflation growth for 2006 was brought about by increases in main groups with high weights namely transport (11 per cent), food and non-alcoholic beverages (3.4 per cent) and housing, water, electricity, gas and other fuels (1.5 per cent). The fuel hike last year, which caught most off guard, has forced many to be cautious in their spending and lock in their profits.
Citigroup economist Sim Moh Siong, in a recent report, described consumer spending Malaysia as stronger with consumer spending slowdown past the danger point. In comparison, six months ago, consumer spending had slowed following the three hikes in interest rates, fuel price hikes and sluggish job growth, he commented.