The research house sees the country’s overall inflation ranging from 2.8% to 3% this year.

The inflation rate in May stood at 2.8% year-on-year (y-o-y), bringing the average inflation year-to-date to 2.4% y-o-y.

Ambank Research said the 2.8% to 3% range would be possible if the average inflation rate over the next seven months hovers between 3% and 3.5%.

It said that despite the current ceiling price for a standard whole chicken being set at RM8.90 per kg, the average price of chicken in June 2022 was RM9.70 per kg.

“This implies that sellers are charging 9% above the ceiling price. This would certainly have a direct and indirect impact on the overall underlying inflation of households,” it said.

Rather than remove the ceiling price of chicken, the government has introduced a new one.

“We hope sellers will now be able to stay below the new price without it affecting their cash flow, and resulting in less pressure both directly and indirectly on the cost of living of households,” it said.

The research house expects the new ceiling price to mirror the current actual market price for chicken of between RM10 and RM12 per kg.

Additionally, it said the removal of the ceiling price for eggs and subsidy on palm cooking oil would have minimal impact on the overall consumer price index (CPI) as eggs and oil only account for 0.9% of the overall CPI basket.