Friday 29 Mar 2024
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KUALA LUMPUR (Dec 28): AmInvestment Bank Bhd expects Malaysia's consumer price index (CPI) to post a slower growth rate of 2.3% for the month of December 2015, due to the lower price of RON95 petrol price during the month.

In a note today, the research house pointed out that the RON95 petrol price was RM1.95 per litre for the month, a reduction of 10 sen from the preceding month.

"The floating petrol pump price mechanism resulted in relatively lower year-on-year (y-o-y) petrol pump prices year to date, amid the weak global crude oil prices.

"Except for July 2015, petrol prices during other months of the year were lower compared to 2014," it said.

It added that the price of RON95 fell 4 sen to RM2.26 per litre in Dec 2014, with inflation rate standing at 2.7% at the time.

For the whole of 2015, AmInvestment expects an average full-year growth of 2.1%, compared to the 3.2% growth posted in 2014.

For 2016, the research house said inflation could rise to an average of 3.1%, due to upside pressure from the continued reduction of subsidies.

To recap, the Statistics Department had on Wednesday (Dec 23) announced the inflation figures for the month of November, reporting a 2.6% y-o-y growth, as transport costs fell for the fourth consecutive month.

"Notably, the cost of transportation had contracted by 5.2%, which kept overall prices in check. Petrol pump prices in Malaysia were unchanged in November 2015 compared to October 2015. However, it is lower compared to a year ago.

"Note that the RON95 petrol was priced at RM2.30 per litre in November 2014 vs. RM2.05 per litre in November 2015," said the research house.

Meanwhile, core inflation rose 1.9% while prices for food and non-alcoholic beverages were lower at 4.1%, compared to 4.7% in October.

The cost component of alcoholic beverages and tobacco jumped 20.7% y-o-y in November, following the hike in excise duties for cigarettes by more than 40%, translating to a 23.6% increase in tobacco price.

AmInvestment said the higher tobacco price had a marginal impact on overall inflation, as the component accounts for 1.73% of the CPI basket.

 

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