PUTRAJAYA, Jan 28 — The cooking gas oil subsidy rationalisation starting this year coupled with the new consumption tax is expected to push inflation up to 4 per cent for the first quarter of 2016, Bank Negara Malaysia Governor Tan Sri Zeti Akhtar Aziz said today.

But inflation is expected to stabilise to 2.5 per cent from April onwards as the rise in living cost will likely be offset by cheaper petrol pump price, Zeti added when commenting on Putrajaya's inflation projection outlined in the revised Budget 2016.

"Inflation is likely to be around 2.3 to 2.5 per cent throughout the year although we expect it to spike at 4 per cent in the first quarter due to adjustments made to prices caused by subsidy rationalisation and the GST.

"But the oil price drop can offset some of these increases," she told reporters at a media briefing on the budget revision here.

Zeti also said that the central bank saw no push-through impact on prices with the depreciating ringgit.

The ringgit was Asia’s worst-performing currency in 2015, losing approximately 18 per cent against the US dollar.

But the currency rebounded for the past few days to around RM4.20 against a dollar on improved oil price and political sentiment that followed Attorney General Tan Sri Apandi Ali’s clearing of Prime Minister Datuk Seri Najib Razak from any criminal wrongdoing over the latter’s receipt of a RM2.6 billion political donation.

Zeti said today the ringgit is valued fairer, a sentiment repeatedly stated until today.

Yesterday, think tank Malaysian Institute of Economic Research (Mier) predicted more joblessness for Malaysians amid higher inflation as the country grapples with slower global growth, a weak ringgit and the continued crude oil price slump.

The state think tank predicted joblessness to increase to 3.3 per cent in 2016, a 0.2 per cent rise from last year, while inflation is expected to climb at the same margin to 2.3 per cent from 2.1 per cent in 2015.

HSBC Ltd on the other hand said there is no data to support claims that savings made from cheaper petrol have translated to more spending.

The bank said the weak ringgit has also dented consumer confidence further, forecasting a slowdown in private consumption growth to below 3 per cent throughout 2016, although the prediction came before Najib announced a RM2,000 tax relief and Employees Provident Funds contribution reduction under the revised Budget 2016.