The government expects the inflation rate to increase by a nominal 0.3% from the current rate of 2% after the rise in petrol prices effective today. The Malaysian Insider pic, September 3, 2013.Malaysia's inflation rate is expected to spike to 2.3% this year due to the fuel hike effective today, Putrajaya's economic czar Datuk Seri Abdul Wahid Omar said today.
The Minister in the Prime Minister's Department's forecast was in tandem with several financial research houses that said Malaysia's current 2% inflation rate will trend higher due to pricier fuel.
Putrajaya said it was cutting subsidies that would save RM3.3 billion a year by raising fuel prices 20 sen with RON95 petrol at RM2.10 a litre while diesel is RM2.00 a litre. The higher quality RON97 is based on market prices.
Abdul Wahid also attempted to assuage fears that the likely implementation of the goods and services tax (GST) would raise the cost of goods by reiterating that there would be exemptions.
"Typically whenever countries implement GST, there would always be exempted items as well as zero-rated items," Abdul Wahid said in Kuala Lumpur today.
Talks about the government's plan to introduce GST have caused concern over increased price of goods, with the people's fears compounded after yesterday's announcement of a fuel price hike.
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