KUALA LUMPUR: Malaysia’s annual inflation rate likely slowed for a fifth consecutive month in July, to 1.2 per cent, as oil prices remain weak, a Reuters poll showed.
One factor keeping the rate down is low transport costs. Economists also say the base comparison from a year earlier has “normalised” as price adjustments were made after Malaysia imposed a goods and services tax (GST) in April 2015.
In February, the annual inflation pace reached a seven-year peak of 4.2 per cent. In June, the rate was 1.6 per cent, down from May’s 2.0 per cent.
In the poll of 11 economists for July, the inflation forecasts ranged between 1.0 and 1.6 per cent. On July 13, Malaysia’s central bank cut its inflation projection for the year to 2-3 per cent from 2.5-3.5 per cent. At the same time, Bank Negara Malaysia (BNM) cut its key policy rate by 25 basis points to 3.0 per cent, the first cut in seven years.
