Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (Feb 23): Malaysia's inflationary pressure is expected to intensify in 2017, due mainly to external risks on the weaker ringgit and potential bullish oil prices, according to economists.

The Department of Statistics yesterday reported that January's inflation rate stands at 3.2%, hitting the highest level in 11 months, due mainly to increases in transport costs on higher petrol prices.

AmInvestment Bank Research in a report today projects inflation in 2017 to average around 2.6%.

"We expect the underlying inflationary pressure to intensify in 2017. Bulk of it will come from a weaker ringgit, firmer commodity and crude oil prices as well as the removal of cooking oil subsidies." it said.

Meanwhile CIMB IB Research has projected the inflation at 2.8% for 2017, an increase from 2.5%, imputing stronger-than-anticipated energy inflation.

CIMB has also factored in rising external risks including uncertainty in the outlook of US trade and monetary policy. It said it expects Bank Negara Malaysia to hold the overnight policy rate at 3% for the rest of the year.

 

      Print
      Text Size
      Share