June inflation rate at 3-year low after GST withdrawal

Consumer price index rose at its slowest pace in more than three years in June, following the withdrawal of a goods and services tax (GST), government data showed today.

The inflation rate in June was at 0.8 percent, its lowest since February 2015, when it was at 0.1 percent.

The figure was below the 1.3 percent forecast by a Reuters poll and sharply down from the 1.8 percent recorded in May.

The abolishment of GST, as well as discounts and price control measures during the Aidilfitri celebrations, had a significant impact on prices of goods in June, the Statistics Department said in a statement.

The new government led by Prime Minister Dr Mahathir Mohamad, put in office after the May 9 general election, scrapped the six percent consumption tax on June 1.

In June, costs were down across all goods and services except for the transport index, which rose 5.5 percent from a year earlier due to higher domestic fuel prices, data from the department showed.

Bank Negara left its key interest rate unchanged at 3.25 percent in its last review, citing slowing inflation and steady economic growth.

- Reuters