If the inflation rate can hit the highest level in eight years with no global economic crisis, he says, imagine how disastrous the situation will be if there is a global economic crisis.
PETALING JAYA: DAP’s Lim Guan Eng says the rise in inflation rate is specific to countries facing socio-economic crises caused by autocratic governments with entrenched corruption.
His comments followed reports that Malaysia’s inflation rate for March had hit 5.1%, the highest since touching 5.7% in November 2008.
In a statement today, the Bagan MP said the only other occasion when the inflation rate had been higher was during the Asian financial crisis in 1998.
“What is unique about this high inflation rate is that there is no global or regional financial crisis, unlike in 1998 or 2008.
“This hike in inflation rate is specific only to countries facing socio-economic crisis caused by autocratic governments lacking accountability, entrenched corruption, failed economic policies and financial mismanagement without transparency,” he said.
Lim added that the Barisan Nasional (BN) federal government could not “simplistically” attribute the rise in inflation to the increase in petrol prices.
He poured scorn on BN’s explanation for the slump in ringgit value, which it had said was due to the fall in the international price of oil.
He said BN had given the same explanation when the price of oil fell to US$30 per barrel and the ringgit was hovering at RM4-RM4.10 to the US dollar.
He pointed out that the oil price was now at US$50 per barrel, but instead of rising, the ringgit value had fallen to RM4.45 to the US dollar.
“How can BN explain this anomaly except to concede that there is an economic crisis of confidence in Malaysia?”
Lim added that BN was trying to divert attention from its economic failures by stoking religious, racist and extremist sentiments through fake news.
“They hope that this will be sufficient to drown out the largest corruption scandal in the world – 1MDB’s RM52 billion scandal and the US$1 billion donation scandal.”
If the inflation rate could hit its highest in eight years with no global financial or economic crisis at hand, he said, “imagine how disastrous the situation will be if there is a global economic crisis caused by inconsistent Trump policies”.
He also warned that the rise in inflation rate would hit the lower-income groups proportionately harder than the higher-income groups as those with lower income spent more of their money on necessities measured by the inflation rate.