KUALA LUMPUR – Malaysians need to brace themselves for an inflation hike of up to 3.9% that is expected to last until October as an aftermath of the removal of ceiling prices for chicken and eggs, as well as the lifting of subsidies for palm cooking oil come July.
This is predicted by MIDF Research, which also expects overall inflation to exceed 3% year-on-year if food prices continue to rise.
A spokesman for the firm said headline inflation could hit a new peak of 5.8% year-on-year, if food prices soar by 7% this year and 10% in 2023, and if the country’s food supply issue worsens.
He added that more worrying is the gradual abolishment of fuel subsidies, which will send the national headline inflation beyond 5%, as consumers and oil producers need to adjust from subsidised RON95 at RM2.05 per litre to RM4.67 by the end of next year.
At this point, there will be a policy trilemma, especially in balancing economic growth, inflation risk and fiscal burden.
On Tuesday, Domestic Trade and Consumer Affairs Minister Datuk Seri Alexander Nanta Linggi announced that the government would end all subsidies on bottled cooking palm oil products effective July 1.
He said the subsidy, introduced last year and initially meant to last for only three months, will be removed for bottled products sold in 2kg, 3kg, and 5kg bottles, while the 1kg polybags will continue to be sold at a subsidised price of RM2.50 each.
According to the ministry, the maximum retail price for palm cooking oil in 5kg bottles is RM29.70 per bottle, 1kg bottle (RM6.70), 2kg (RM12.70), and 3kg (RM18.70).
Meanwhile, the government will no longer impose a ceiling price control on chicken and eggs July 1 onwards.
Under the maximum retail price list, poultry is selling for RM8.90 per kg for Standard Round Chicken and RM9.90 per kg for Super Round Chicken in Peninsular Malaysia.
Chicken eggs are priced at 43 sen each for Grade A, 41 sen each for Grade B, and 39 sen each for Grade C. The ceiling price in Langkawi, Sabah, Sarawak and Labuan varies by district.
Yesterday, Prime Minister Datuk Seri Ismail Sabri Yaakob announced additional allocations for the Bantuan Keluarga Malaysia (BKM) financial aid to address the rising cost of living.
He added that the BKM cash handout will be increased by RM100 for households and RM50 for single individuals from the B40 group. – The Vibes, June 23, 2022
