KUALA LUMPUR, Dec 23 — MIDF Amanah Investment Bank Bhd (MIDF Research) has maintained Malaysia’s inflation rate forecast at -1 per cent until year-end, weighed down by sluggish crude oil prices and the extension of electricity bill discounts.

In a note today, the research firm said improvements in crude oil prices are anticipated to remain sluggish on mounting demand concerns, particularly over surging Covid-19 cases.

“Additionally, the implementation of the government’s electricity bill discounts until the year-end will cushion the impact of utility charges on consumers, hence, contributing to downward pressure on the Consumer Price Index (CPI),” it said.

MIDF Research opined that the recovery for spending on non-essential items and the overall domestic expenditures would take time to fully recover, despite Malaysian consumers resuming their spending activities. 

“Consumers may hold back their spending plans on concerns over future personal finances and outlook for the job market. 

“In view of the recovering economic activities, we foresee that Bank Negara Malaysia will not be pressured to further ease the policy rate for now,” it added. 

The cumulative cuts of 125 basis points in the Overnight Policy Rate (OPR) earlier this year were sufficient to provide accommodative monetary policy support to the economy, it added.

Earlier today, the Department of Statistics Malaysia (DoSM) announced that Malaysia’s CPI slipped 1.7 per cent year-on-year to 120.0 per cent in November 2020 against 122.1 per cent in the same month last year, and declined 0.2 per cent compared with October 2020. 

The DoSM attributed the decline mainly to the fall in transport (-11.1 per cent), housing, water, electricity, gas and other fuels (-3.3 per cent), clothing and footwear (-0.5 per cent) and furnishings, household equipment and routine household maintenance (-0.1 per cent), all of which contributed 45.7 per cent to the overall inflation weight. — Bernama