CPI deflates as MCO pushes housing, transport prices lower – MIDF
Malaysia’s consumer price index (CPI) deflated further to a record low, declining 2.9 percent in April to 117.6 as the movement control order (MCO) pushed prices of housing and transport lower.
Malaysian Industrial Development Finance (MIDF), in a research note, said the Malaysian consumer price deflation recorded at -2.9 year-on-year (yoy) in April was far lower than market forecast of -1.5 percent yoy.
Malaysia’s consumer price index (CPI) deflated further to a record low, declining 2.9 percent in April to 117.6 as the movement control order (MCO) pushed prices of housing and transport lower.
Malaysian Industrial Development Finance (MIDF), in a research note, said the Malaysian consumer price deflation recorded at -2.9 year-on-year (yoy) in April was far lower than market forecast of -1.5 percent yoy.
“The CPI rate reached an all-time low mainly due to declining prices of housing and utilities by -2.2 percent and transport by -21.5 percent yoy,” it said.
It noted the food and beverage (F&B) inflation, however, maintained above 1 percent.
“Increase of prices in food and non-alcoholic beverages was mainly due to stockpiling amid the MCO which got extended throughout April.
“The increase was mainly in prices of rice and fresh items like meat and vegetables,” it said.
MIDF said Kedah and Perlis topped the rank with the highest drop in prices at -3.9 percent yoy, followed by Sarawak at -3.8 percent yoy, while Kuala Lumpur recorded the lowest fall at -2.0 percent yoy followed by Selangor and Putrajaya at -2.3 percent yoy.
However, it said Kuala Lumpur is among the states/ federal territories which recorded the lowest increase in F&B prices at below 1 percent yoy along with Kedah, Perlis, Sarawak, Sabah and Labuan.
Based on the latest development, Covid-19 seemed to have taken a big toll on housing prices as consumers move away from discretionary to necessity, avoiding purchases of big ticket items, said the research house.
“The trend is likely to continue for a substantial period of time as concerns over future personal finances persist.
“As housing and utilities expenditure is the second biggest component in overall CPI basket, we opine these to have a significant impact on overall inflation.
“We revised inflation estimate downward to -0.5 percent,” MIDF added.
- Bernama
