KUALA LUMPUR: Malaysia’s consumer prices are expected to fall in January, the first decline in nearly a decade, amid a drop in domestic fuel prices, a Reuters poll showed today.
The consumer price index for the month was forecast to fall 0.2% from a year earlier, the first decline since November 2009 when it fell 0.1%, according to the median estimate among 13 economists surveyed.
Individual estimates, however, ranged between an annual decline of 0.8% and a rise of 0.5% in the index.
Malaysia’s decision to switch to a weekly managed float mechanism for retail fuel in January, as well as lower global crude oil prices, likely weighed on transport costs, economists in the poll said.
Inflation has been benign since the government removed the goods and services tax (GST) in June 2018 and reinstated a narrower sales and services tax (SST) three months later.
Annual inflation in November and December were 0.2%, matching the rate in August, when it touched a three-and-a-half-year low.
Bank Negara Malaysia said last week Malaysia was not at risk of deflationary pressure. Headline inflation, which came in at 1% in 2018, was likely to average higher this year, it said.
“Inflation remains distorted by administrative measures.
“The central bank will likely focus on the growth metric for monetary policy decision-making,” Standard Chartered said in a note ahead of the CPI data.