KUALA LUMPUR, May 20 — Malaysia’s consumer price index (CPI) deflated further to a record low, declining 2.9 per cent in April to 117.6, as the movement control order (MCO) pushed prices of housing and transport lower.
Malaysian Industrial Development Finance (MIDF), in a research note, said the Malaysian consumer price deflation recorded at -2.9 year-on-year (yoy) in April was far lower than market forecast of -1.5 per cent yoy.
“The CPI rate reached an all-time low mainly due to declining prices of housing and utilities by -2.2 per cent and transport by -21.5 per cent yoy,” it said.
It noted the food and beverage ( F&B) inflation, however, maintained above 1.0 per cent.
“Increase of prices in food and non-alcoholic beverages was mainly due stockpiling amid the MCO which got extended throughout April.
“The increase was mainly in prices of rice and fresh items like meat and vegetables,” it said.
MIDF said Kedah and Perlis topped the rank with the highest drop in prices at -3.9 per cent yoy, followed by Sarawak at -3.8 per cent yoy, while Kuala Lumpur recorded the lowest fall at -2.0 per cent yoy followed by Selangor and Putrajaya at -2.3 per cent yoy.
However, it said Kuala Lumpur is among the states/ federal territories which recorded the lowest increase in F&B prices at below 1.0 per cent yoy along with Kedah, Perlis, Sarawak, Sabah and Labuan.
Based on the latest development, Covid-19 seemed to have taken a big toll on housing prices as consumers move away from discretionary to necessity, avoiding purchases of big ticket items, said the research house.
“The trend is likely to continue for a substantial period of time as concerns over future personal finances persist. As housing and utilities expenditure is the second biggest component in overall CPI basket, we opine these to have a significant impact on overall inflation.
“We revised inflation estimate downward to -0.5 per cent,” MIDF added. — Bernama
