KUALA LUMPUR – Inflation for 2021 hiked by 2.5% brought up by soaring food and fuel prices in Malaysia, the Department of Statistic Malaysia (DoSM) stated.
According to the Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin, out of the total 552 items listed in the consumer price index (CPI), about 184 of them had a price increase.
Additionally, the hike was also greater than the previously recorded 0.7% before the COVID-19 outbreak in 2019.
He stated in a statement, that the pandemic had impacted the community’s daily lives but the vaccination programmes have helped in restoring business confidence and help boost consumer confidence to go out to shop.
The DoSM has released the ‘Analysis of Annual CPI 2021’ report which details the analysis of inflation of 12 main groups of products and services between 2010 and 2021.
The statement also added that the lifting of interstate travel bans along with restoring economic sectors from October 11, 2021, had also aided Malaysia’s economic recovery, particularly in the distribution and retail industry.
Breaking down the 2.5% inflation growth, the statement reported that the contributors were transport (11%); food and beverages or F&B (1.7%); furnishing, household equipment and routine household maintenance (1.6%); and housing, water, electricity, gas, and other fuels (1.5%). These contributors made up 72% of the total CPI.
Apart from that, Mohd Uzir stated that about 80% of the F&B’s food components saw an increase.
He explained that the rise in global commodity costs had an effect on food inflation. 2021 saw a rise in chicken prices, above the average price in 2020, caused by the price hike for animal feed.
Furthermore, the fluctuation in local market prices were a result of the import shortages, Movement Control Orders (MCOs), and the closure of Malaysia’s borders.
All states recorded inflation hike
Meanwhile, transportation inflation increased by 11%, which he attributed to the base effect of the setting of ceiling price for petrol RON95 (RM2.05 per litre) and diesel (RM2.15 per litre) from March 2021.
Consequently, September’s discontinuation of discounts for utility bills that were implemented over three months under the National People’s Well-Being and Economic Recovery Package (PEMULIH), had also exerted upward pressure on the national inflation for 2021.
“All states recorded increases in inflation and seven states had shown a growth above the 2.5% national inflation level. Terengganu recorded the highest increase with 3.4%,” Mohd Uzir explained.
The hike was primarily because of increasing prices of chicken, egg, cooking oil, and fish as well as seafood last year compared to 2020, he added.
At the same time, he stated that inflation for the group with incomes below RM3,000 climbed 2.2% in 2021 against the 1% contraction in 2020. The transport group contributed the highest increase, marking 13.3% in 2021 compared to a negative 12% in 2020.
Core inflation moderated at 0.7% last year compared to 1.1% in the year before.
He attributed the highest increase in core inflation to the furnishings, household equipment and routine household maintenance group which recorded 1.6% last year.
According to Mohd Uzir, overall inflation in all ASEAN countries had increased between 1.2% and 3.9% last year.
The Philippines had marked the highest rate with 3.9% while Thailand recorded the lowest with 1.2%.
Furthermore, inflation for Singapore, Vietnam, Indonesia and Brunei grew marginally at 2.3%, 1.9%, 1.6% and 1.5% respectively, he added.
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