PETALING JAYA: Former prime minister Najib Razak has expressed concern over the rising prices of basic goods, saying Malaysia’s economy may have fallen into a “stagflation”.
Describing stagflation as “persistent high inflation combined with high unemployment and stagnant demand in a country’s economy”, Najib said this was an undesirable situation for any country.
He said it was normal for the cost of goods to rise whenever a major festive period was around the corner, but the spike in prices recently was unparalleled.
Citing the domestic trade and consumer affairs ministry’s own phone app, he said the price for chub mackerel or ikan kembung had risen to RM24 per kg while chicken was selling at RM12 a kg.
“The people are the ones most affected by the surge in prices of goods at a time when their income and the economy has yet to recover, the unemployment rate is still high and the pandemic is getting worse.
“It’s as though Malaysia’s economy has fallen into the ‘stagflation’ category,” he said in a Facebook post today.
Najib said he had urged the Perikatan Nasional (PN) government in February against fully stopping the electricity subsidy at one go and to cap petrol prices, predicting that inflation would rise with the hike in fuel prices and weaker domestic demand.
While Putrajaya had set a ceiling price for RON95 and diesel, his advice on the subsidy for electricity went unheeded.
“Because of that, last month, Bank Negara Negara (BNM) had to issue a warning that the inflation rate would spike above 5% in the second quarter of this year, right around Raya time.”
In March, BNM said headline inflation was expected to temporarily spike to above 5% in the second quarter of 2021 due to a lower base from cheaper fuel prices in the corresponding quarter of 2020.
However, it maintained that the spike would be temporary, with the average for the year expected to be between 2.5% and 4%. - FMT
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