KUALA LUMPUR (Aug 8): The various measures implemented by the Government to control the increase in prices of basic goods and services kept the inflation rate in June at a moderate level while avoiding hyperinflation.
Deputy Finance Minister I Datuk Mohd Shahar Abdullah said such measures include price control on selected goods and services, particularly through the provision of fuel and selected food price subsidies, as well as electricity rebates for domestic consumers.
“The move has helped ensure the inflation rate of Malaysia in June at a moderate level compared to other countries. This then prevented hyperinflation, which is when the inflation rate remains at a very high level from one month to the next, and that it can erode the value of a country's currency.
“In addition, the current fiscal policy and monetary policy also remain accommodative in ensuring that the country's inflation is at a reasonable level,” he said in the Dewan Negara on Monday (Aug 8).
Mohd Shahar was responding to a question by Senator Nuridah Mohd Salleh, who asked how long the country will be in an inflationary situation, as well as how true are projections that Malaysia's economy is headed towards hyperinflation.
The inflation rate in June was recorded at 3.4%, driven by food and non-alcoholic beverages (up 6.1%), transportation (5.4%), and restaurants and hotels (5%).
According to Mohd Shahar, inflation rates in the same month in several developed economies, such as the US and the UK, exceeded 9%, while in Thailand, inflation increased by over 7%, whereas Singapore and the Philippines logged inflation of over 6%.
The Paya Besar Member of Parliament noted that inflationary pressure in 2022 is a global phenomenon, in line with the price of Brent crude oil, which had remained above US$100 per barrel since the end of March.
He noted that disruption to the world's supply chain, which had affected the supply of fertilisers and fodder, had also increased food prices sharply.
“As an open economy, Malaysia is not exempt from global inflationary pressure. Therefore, an increase in prices of goods, especially finished products and imported intermediary goods, is difficult to avoid completely until the pressure from these external factors stabilises.
"Nevertheless, the Government is always concerned about the increase in the rate of inflation, which causes anxiety among the people and businesses, and continues to monitor the current global economic development,” added Mohd Shahar.
For more Parliament stories, click here.