KUALA LUMPUR – The nation is “nowhere near” the risk of overly high inflation, said Bank Negara Malaysia (BNM) governor Tan Sri Nor Shamsiah Mohd Yunus.
She said that this is because upward consumer price pressure can mainly be attributed to Covid-19-pandemic-driven supply chain disruptions, as demand recovers in tandem with improving economic conditions due to vaccinations.
Nor Shamsiah drew attention to the very high inflation of 8.5% year-on-year rise in the Consumer Price Index (CPI) in 2008, when crude oil prices rose to about US$100 a barrel.
“We will remain vigilant of all the ongoing developments in demand and cost pressures, and will continue to actively engage with industry players to examine evolving price dynamics closely as our economic conditions improve,” Shamsiah told a press conference when announcing Malaysia’s 4Q for 2021.
“Malaysia’s situation is different from the US, which is experiencing ‘the culmination of an acute supply disruption and strong demand pressures’.
“There is also continued slack in our economy and the job market. As such, core inflation is expected to remain modest,” Shamsiah said.
BNM in a statement today said that Malaysia’s CPI increased 3.2% in 4Q 2021 from a year earlier.
For 2021, average inflation was 2.5%, compared to a deflation of 1.2% in 2020.
Shamsiah was commenting on reports today, quoting the US Bureau of Labour Statistics, that the US CPI rose 7.5% in the 12 months ended January 2022 from a year earlier.
“It was the steepest annual price increase since February 1982 and worse than economists had forecast,” CNN reported.
Such sentiment has generated anticipation of US interest rate hikes to combat inflation. – The Vibes, February 11, 2022
