After subsidy cuts, inflation rate spikes and likely to accelerate next year
Malaysia has faced its steepest inflation rate hike in 20 months, mainly caused by the fuel subsidy cut in September which increased pump price by 20 sen per litre, Maybank Investment Bank (IB) has said. The research house also predicted that inflation rate will likely accelerate next year compared to 2013, as a result of the recent sugar subsidy cut announced in Budget 2014 last week. In its daily report released here yesterday, Maybank IB said that inflation in September 2013 was up by 2.6 per cent year-on-year, its highest so far this year. It also said that “transport” was the main factor in the hike as it went up 4.6 per cent year-on-year, after the pump price of RON95 petrol and diesel went up in September 3, and RON97 petrol two days later. As a result, it expected that inflation rate will pick up from 2 per cent this year to between 3 and 3.5 per cent next year. “The forecasts reflect the combined impact of the 14 per cent hike in cigarette prices on 1 Oct 2013, the...