KUALA LUMPUR: Finance Minister II Datuk Seri Johari Abdul Ghani has alleviated market concerns over the spike in inflation, saying it was due to the cost of petrol.
Malaysia’s consumer price index (CPI) rose 4.5% in February, the highest in eight years.
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“If you look at February inflation and compare it with February last year, the main reason is the cost of petrol. If you look at February last year, RON95 was only RM1.75 and here it is already RM2.30. That is the major part of the contribution,” he told reporters on the sidelines of the Global Offset & Countertrade Association Asia Pacific Conference 2017 today.
“If you look at transportation costs, in the basket of CPI, that represents almost 13-14%. When you have that factor, the petrol price goes up from US$30 to US$55, definitely there is an impact,” he said.
However, excluding transportation costs, core inflation remained the same at about 2.2-2.3%. Johari said with oil price coming down, inflation would ease a little.
“Nevertheless we also need to manage this inflation. There are certain things we can control. The most important thing we need to manage is the basic core inflation items. But something that is related to external factor like oil price is beyond us,” he added.
