KUALA LUMPUR: RAM Ratings expects Malaysia’s overall inflation rate for December 2019 to accelerate to 1.2%, from 0.9% the preceding month, primarily due to a larger contribution from the food component amid low-base effects from the previous year.
For the full year, it expects overall inflation to clock in at 0.7% in 2019, from 1.0% in 2018.
The Department of Statistics is scheduled to release the latest inflation data tomorrow.
Looking ahead, RAM has lowered its inflation forecast for 2020 to 1.7% from 1.9%. This follows the government’s recent decision to delay the commencement of the targeted fuel subsidy programme, which would have raised consumer fuel prices to market levels effective Jan 1.
As such, the contribution from the transport component to inflation will likely be lower than initially envisaged, reining in overall inflation.
RAM said rising tensions in the Middle East have exacerbated fears of severe supply disruptions, in turn exerting upward pressure on global crude oil prices. “That said, this is unlikely to impact Malaysia’s inflation in 1H 2020 given the delayed implementation of the targeted fuel subsidy programme.”
RAM has lowered its inflation forecast for 2020 to 1.7% from 1.9%. – BERNAMAPIX
