2.5% spike in inflation last year driven by rising food, fuel prices: DoSM

KUALA LUMPUR – Malaysia’s inflation increased by 2.5%, driven by rising food and fuel prices in 2021, the Statistics Department said.

Chief statistician Datuk Seri Mohd Uzir Mahidin said 184 food items of the overall 552 items in the consumer price index (CPI) “basket” recorded an increase.

He said the increase was also higher compared with 0.7% recorded during the pre-pandemic year of 2019.

“The Covid-19 pandemic affected the daily lives of the community. However, vaccination programmes have helped restore business confidence and further increase consumer confidence to go out shopping,” he said in a statement following the release of the Analysis of Annual CPI 2021 report today.

The report contains a detailed analysis of the inflation time series from 2010 to 2021 by 12 main groups of goods and services.

Additionally, he said the lifting of interstate travel bans and restoration of all economic sectors starting October 11, 2021 contributed to the country’s economic recovery, especially in the distribution and retail sectors

“Overall, the 2.5% increase was contributed by the index of transport (11%), food and beverages (1.7%), furnishings, household equipment and routine household maintenance (1.6%) and housing, water, electricity, gas, and other fuels (1.5%), which contributed 72% to the total CPI weight,” he said.

Uzir said a total of 80% of food components in F&B have increased. 

“The increase in global commodities prices had impacted food inflation. The rise of chicken prices above the 2020 average price was due to the rise of price of animal feedstuff,” he said.

He said the lack of import supply, movement control orders, as well as the closure of the national border, have influenced the fluctuation of prices in the local market.

On transportation inflation, Uzir said the double-digit increase of 11% was due to the base effect of the setting of ceiling price for petrol RON95 (RM2.05 per litre) and diesel (RM2.15 per litre) starting March 2021.

Additionally, he said the discontinuation of the monthly electricity bill discounts given to domestic consumers under the National People’s Well-Being and Economic Recovery Package – which was implemented for three months and ended in September 2021 – also exerts upward pressure on the national inflation for 2021.

“All states registered increases in inflation, with seven states showing an increase above the national inflation level of 2.5%. The highest increase was recorded by Terengganu (3.4%),” he said.

He said the increase was mainly due to the higher prices of chicken, eggs, cooking oil, fish, and seafood in 2021 compared with the preceding year.

Meanwhile, he said inflation for the group income below RM3,000 increased 2.2% in 2021 compared with a contraction of 1% in 2020 with the transport group contributing the highest increase of 13.3% as against a negative 12% recorded in 2020.

“In 2021, core inflation was slower at 0.7% as compared with 1.1% recorded in the previous year,” he said.

He said the highest increase in core inflation was mainly contributed by the furnishings, household equipment, and routine household maintenance group of 1.6%. 

On inflation in all Asean countries, he said inflation in 2021 registered increases between 1.2% to 3.9%.

He said the Philippines recorded the highest inflation rate of 3.9% while Thailand recorded the lowest inflation at 1.2%.

“Singapore, Vietnam, Indonesia and Brunei recorded a lower increase in inflation at 2.3%, 1.9%, 1.6%, and 1.5% respectively,” he said. – Bernama, June 1, 2022