Posted by SM Maulana
(AP) Malaysia’s inflation hit a 22-month high of 3.8 percent in May largely due to food price increases, and is expected to climb further this month following recent fuel price hikes, a cabinet minister said.
Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad said inflation won’t reach double digits because the transport sector only has a 15.9 percentage contribution in the consumer price index.
“You will see further increases in the CPI this month mainly due to the fuel price hike. But I don’t expect it to be double digit,” he said.
For the first five months of this year, inflation rose by 2.9 percent. May’s inflation was 0.8 percent more than April’s.
The government has said it expects the inflation to be about 5 percent for the year 2008, thanks to the 41 percent hike in gasoline prices and 63 percent hike in diesel prices this month.
Prime Minister Abdullah Ahmad Badawi has said he was forced to raise prices because the government can no longer afford to subsidize fuel in the wake of the record high world oil prices.
Shahrir said Abdullah has already promised not to raise fuel prices this year but if oil prices drop the government could revise the pump price.
He said food and nonalcoholic beverages contributed 89 percent to the hike in May’s inflation rate. However, he said he believed food prices have peaked and government will take further steps including expanding the list of controlled items to curb inflation.
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