Inflation rate in 2024 to range between 2.1 and 3.6pct

The country’s inflation rate is forecast to range between 2.1 percent and 3.6 percent in 2024.

The Finance Ministry said this is partly due to a gradual shift towards a targeted subsidy mechanism to ensure a more equitable distribution of resources.

“Additionally, potential risks to the inflation outlook remain subject to the fluctuations in exchange rates and supply-related factors such as global commodity prices, geopolitical uncertainties and climatic conditions,” the ministry said in its Economic Outlook 2024 report released today.

The ministry said for this year, inflation is estimated to be in the range of 2.5 percent to 3 percent.

“The Consumer Price Index (CPI) grew by 2.8 percent from January to August 2023, attributed to moderating trend in global commodity prices, easing supply-related disruptions, existing price controls and provision of subsidies for selected items, as well as the lagged impact from the normalisation of the Overnight Policy Rate.

“Inflation is expected to moderate in the remaining months, while core inflation is expected to remain elevated relative to the long-term average,” it said.

On wholesale prices, the finance ministry said the Producer Price Index (PPI) is expected to be higher in 2024 at 0.1 percent to 2.1 percent in tandem with diminishing base effects and better production activities.

The PPI for local production decreased by 2.4 percent during the first eight months of 2023, attributed to moderate global commodity prices, particularly crude oil.

“Within specific sectors, the contraction in PPI was predominantly driven by a significant decrease in agriculture, forestry and fishing (19.4 percent) as well as mining (8.4 percent) sectors.

“The PPI is expected to contract between 2.5 percent and 0.5 percent in 2023, given the lower global input cost,” it said.

- Bernama

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