Friday 29 Mar 2024
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KUALA LUMPUR (Oct 23): AmBank Research expects Malaysia’s 2017 the full-year inflation to be around 3.7% which is closer to the higher range set by Bank Negara Malaysia at 3% – 4%.

In a note today, AmBank group chief economist Anthony Dass said pressure will continue to come from retail fuel prices given firmer global oil prices, and the low base.

“Thus we, expect October’s inflation to be around 4% year-on-year (y-o-y)”, he said.

Dass said that after four consecutive months of inflation growing below 4%, it rose 4.3% y-o-y in September which is close to April’s reading of 4.4% y-o-y.

“Higher fuel prices is believed to be the main factor. Meanwhile, core inflation, which excludes prices of fresh food and administered prices, remained stable at 2.4% for the second straight month.

“The higher inflation in September came from both food (+4.6% y-o-y) and non-food (+4.2% y-o-y) sectors,” he said.

Dass added that his base case suggests that the Overnight Policy Rate will stay put at 3.00% for 2017, while he continues to maintain our 45% chance for a rate hike in November by 25 basis points.

He said stronger inflation numbers and macro data which point to another round of better-than-expected gross domestic product  growth plus a pickup in core consumer price index will open the door sooner for a rate hike.

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