Calling this the single biggest economic challenge which Prime Minister Najib Razak must address in the 2018 Budget, Pua said the people had been feeling the pinch despite assurances from the government that the economy is doing well.
“The question must be asked, if Malaysia’s economy is doing so well, why is it that ordinary Malaysians on the street are feeling the pain?
“The answer is obvious. While Barisan Nasional (BN) leaders sing praises of themselves over their supposed achievements, Malaysia’s inflation rate – which reflects the cost of living in the country – has been hitting record levels unseen since the global financial subprime crisis a decade ago,” he said in a statement.
Pua, who is DAP’s national publicity secretary, said Malaysia recorded an inflation rate of 4.3% year-on-year in September, the highest since March, mainly due to the rise in transportation costs and prices of food and non-alcoholic beverages.
According to the latest consumer price index (CPI) released by the Statistics Department on Friday, the transportation segment increased 15.8% on costlier fuel while the food and non-alcoholic drinks group rose 4.6%.
This is despite gross domestic product (GDP) figures from Bank Negara Malaysia, which said given the strong growth of 5.7% in the first half of the year, the economy was expected to expand by more than 4.8% in 2017.
Pua said despite the implementation of the goods and services tax (GST) in April 2015, which resulted in a spike in inflation, the CPI had only increased to 2.1%.
This figure remained unchanged in 2016, he added.
Despite claims by the government that the rising inflation was only temporary and would decline a year or so after the implementation of GST, Pua said this had not happened.
“The CPI not only remained stubborn, it has accelerated to 4% year to date in 2017, demonstrating how wrong the BN administration has been.”
In fact, he said Malaysia was suffering from negative real interest rates, adding that a survey of local banks would show that they are only paying interests of up to 3.05% for one-month fixed deposits.
“If one keeps cash in a current or savings account as most Malaysians do, the gap would be even bigger.
“This means our hard-earned savings kept in the banks are worth less tomorrow than they are today,” he added.
“Not only have Malaysians gotten markedly poorer globally as a result of the massive depreciation of the ringgit over the past four years, our wealth is shrinking even in local ringgit terms.”
Pua warned that if Najib, who is also the finance minister, decided to gloss over the inflation, the consequences for the people would be dire.
The 2018 Budget will be tabled in the Dewan Rakyat this Friday.