Inflation increased faster in June due to the fuel price adjustments but it remains benign, says economists. Research houses have now revised their Consumer Price Index (CPI) forecasts lower for 2015. <\/p>\n
The Statistics Department said the 2.5 per cent increase in June versus a year ago was led by increases in the alcoholic beverages & tobacco group by 11.3 per cent. <\/p>\n
CIMB Investment Bank economist Jarratt Ma said inflation rose mainly because of the first petrol price increase since March and higher food prices. <\/p>\n
He said the recent increase in oil prices may pause for now, keeping petrol prices at around current levels for the rest of the year. <\/p>\n
\u201cSo far, the weakening of the ringgit has had limited impact on prices and is expected to continue to do so,\u201d he said, adding that the annual inflation forecast has been revised down to 2.4 per cent in 2015 Economist Dr Chua Hak Bin of Bank of America Merrill Lynch expects inflation to hover at around the two per cent handle for the next few months. <\/p>\n
\u201cBased on the current global oil price trajectory, fuel prices could be kept unchanged or adjusted slightly lower in the months ahead, barring sharp spikes or plunges. <\/p>\n
\u201cInflation remains generally benign,\u201d he said, adding that the research house expects a full year average forecast of 2.3 per cent. <\/p>\n
Alliance Research said the increase in June CPI also came as a result of non-food inflation, which has been escalating in recent months, from 0.3 per cent in March to 2.1 per cent in June. <\/p>\n
This clearly suggests the building-up of price pressures from GST, which was implemented on April 1, said chief economist Manokaran Mottain. <\/p>\n
The research house has also lowered its full year inflation forecast to 2.5 per cent from 3.0 per cent. Chua has maintained a 25 basis point cut in policy rate to 3.00 per cent before the end of the year as growth slows more significantly in the quarters ahead. <\/p>\n
\u201cWe are expecting lower energy prices (particularly liquefied natural gas) and the 6 per cent Goods and Services Tax or GST to hurt investments, exports and consumer spending. <\/p>\n
\u201c The research house expects GDP to slow to 4.6 per cent this year, the low end of the government’s 4.5 – 5.5 per cent range – nst<\/p>\n","protected":false},"excerpt":{"rendered":"
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