Higher fuel costs probably pushed up Malaysia\u2019s inflation rate this month to above the 4.5 per cent rate posted in February, though there\u2019s no evidence that price pressures are spreading more broadly in the economy, an official from the central bank said.<\/p>\n
Last month\u2019s inflation rate \u2014 which was the highest in more than eight years and exceeded the median estimate of 3.9 per cent in a Bloomberg survey \u2014 wasn\u2019t a surprise to the central bank, Fraziali Ismail, director of the economics department at Bank Negara Malaysia, said in an interview in Kuala Lumpur. If oil prices stay where they are, it\u2019s a \u201cquestion of arithmetic\u201d that inflation would accelerate, he said.<\/p>\n
\u201cTypically in the past, there could be second-round effects if the economy is above potential\u201d and there are demand pressures, he said on March 24. \u201cYes, the economy is on the up, but we don\u2019t see those pressures emanating at the moment.\u201d<\/p>\n
Bank Negara Malaysia said in its annual report released last week that inflation will probably average 3 per cent to 4 per cent this year, up from 2.1 per cent in 2016.<\/p>\n
The spike in inflation is complicating Bank Negara\u2019s job as it seeks to keep interest rates low enough to support the economy. The bank has left its benchmark rate unchanged at 3 per cent since a surprise cut in July, and economists surveyed by Bloomberg are divided in their views on whether it will raise, reduce or keep rates unchanged this year.<\/p>\n
While economic growth has picked up speed, it\u2019s not exceeding the pace of potential output yet, which is estimated to be about 4.7 per cent this year, Fraziali said. The economy grew 4.2 per cent last year and is forecast by the central bank to expand 4.3 per cent to 4.8 per cent in 2017.<\/p>\n
\u201cWe are operating close to potential, but we don\u2019t see signs that we are exceeding,\u201d he said. \u201cUnless the economy is jolted to an accelerated growth, then there\u2019s a higher potential for second-round effects.\u201d The central bank will monitor signs of slack in the economy, such as unemployment and capacity utilisation, to give it \u201cbetter clues on how the economy is faring against potential,\u201d he said.<\/p>\n
Julia Goh, an economist at United Overseas Bank Ltd in Kuala Lumpur, said Bank Negara will probably maintain its currency policy stance for the rest of the year.<\/p>\n
\u201cDespite higher inflation pressures which are cost-push, we expect the overnight policy rate to stay unchanged at 3 per cent this year given lingering growth risks, the absence of strong demand conditions, and abating financial imbalance risks,\u201d she said in a research note today. \u2014 Bloomberg<\/p>\n","protected":false},"excerpt":{"rendered":"
Higher fuel costs probably pushed up Malaysia\u2019s inflation rate this month to above the 4.5 per cent rate posted in February, though\u2026<\/p>\n","protected":false},"author":1,"featured_media":55535,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"bo_wartawan":[],"bo_jenis":[],"class_list":["post-55534","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-c48-news"],"better_featured_image":{"id":55535,"alt_text":"","caption":"A general view of the headquarters of Malaysia's central bank, Bank Negara Malaysia, in Kuala Lumpur January 29, 2013. REUTERS\/Bazuki Muhammad\/File Photo","description":"","media_type":"image","media_details":{"width":800,"height":525,"file":"2017\/03\/bank_negara.jpg","filesize":125556,"sizes":{},"image_meta":{"aperture":"0","credit":"\u00a9 Bazuki Muhammad \/ Reuters","camera":"","caption":"A general view of the headquarters of Malaysia's central bank, Bank Negara Malaysia, in Kuala Lumpur January 29, 2013. REUTERS\/Bazuki Muhammad\/File Photo","created_timestamp":"1479342559","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"A general view of the headquarters of Malaysia's central bank, Bank Negara Malaysia, in Kuala Lumpur","orientation":"1","keywords":[]}},"post":55534,"source_url":"https:\/\/buletinonlines.net\/v7\/wp-content\/uploads\/2017\/03\/bank_negara.jpg"},"yoast_head":"\n