NAJIB’S GST LIES COME UNSTUCK: INFLATION HITS STUNNING 4.5% – HIGHEST IN 8 YEARS – AS MALAYSIANS SUFFER

KUALA LUMPUR: Malaysia’s consumer price index rose to an eight-year high in February, but is unlikely to lead to any change in monetary policy.

Annual inflation grew 4.5% in February, the highest since November 2008 when it hit 5.7%.

In January, the annual rate was 3.2%. A Reuters poll had forecast a February level of 4.1%, just short of the 4.2% peak hit in February last year.

Economists said a fuel price hike in February and a low base stemming from a cut in transport costs from last year contributed to the month’s high inflation rate.

Rising inflation, however, was not seen as worrying Malaysia’s central bank, as it was mainly due to the adjustments in domestic fuel prices, said Brian Tan, an economist with Nomura in Singapore.

“We don’t foresee any changes to policy as it’s clear they remain quite cautious to any potential downside risk to growth, and they don’t want to jump the gun too early,” Tan said.

Bank Negara said last Thursday it expected inflation to average between 3% and 4% for 2017.

Malaysia, an oil and natural gas exporter, has benefited from recovering global oil prices this year.

The central bank expects headline inflation, which it says will be “relatively high” in the first half of 2017 due to higher fuel prices, to dip in the second half.

– Reuters