KUALA LUMPUR, Jan 24 — RHB Research expects headline inflation to range between 1.5 per cent and 2.5 per cent this year compared with one per cent in 2018, due to the increased volatility in oil prices in recent months.

In a note today, its economist Vincent Loo Yeong Hong said the government floated fuel prices in January 2019 to reflect the drop in oil prices from US$80 (US$1=RM4.13) per barrel in November 2018 to slightly above US$60 per barrel at present.

"Nevertheless, we are of the view that inflationary pressure may pick up in the second half due to higher fuel prices given production cuts by the Organisation of the Petroleum Exporting Countries (Opec) and its alliance,” he said.

Earlier today, the Department of Statistics announced that the Consumer Price Index (CPI), which measures headline inflation, increased 0.2 per cent in December 2018 to 121.1 compared with 120.9 in the corresponding month of the preceding year.

The department said the increase in the overall index was due to higher price for housing, water, electricity, gas and other fuels (+2.0 per cent), restaurants and hotels (+1.3 per cent), alcoholic beverages and tobacco (+1.1 per cent), education (+1.1 per cent) and food and non-alcoholic beverages (+0.7 per cent).

On a monthly basis, however, the CPI increased 0.1 per cent as compared to November 2018 while CPI for January-December 2018 period registered an increase of 1.0 per cent as compared to the same period in the previous year. — Bernama