Inflation rate in Malaysia - The inflation rate is expected to rise to 2.5 percent in 2013, driven by the restructuring of the subsidy program and the potential recovery in demand later this year.
Alliance Research said the overnight policy rate is expected to remain unchanged at three per cent this year, ensuring the accommodative stance of monetary policy and price stability sufficient levels, low levels of inflation risk as compared to recovery.
Economic experts, Manokaran Mottain said Malaysia's inflation slowly declined in line with global commodity prices, especially crude oil prices.
The pump prices of petroleum and other related products has not changed since the time of cessation of restructuring programs of subsidies proposed by the Performance Management and Delivery Unit (Pemandu).
The inflation rate reached a high peak at 3.5 percent in June 2011.
"In the future, although we expect a slower rate of inflation in the first half, the potential reduction of subsidies after the General Election-13 is expected to push a reversal in price pressure in the second half of 2013.
"Overall, we expect inflation to increase to 2.5 per cent, driven by demand recovery later this year, both inside and outside the country," Manokaran said in a research note today.
Inflation eased slightly in December 2012, when the consumer price index grew modestly by 1.2 percent year-on-year compared with 1.3 percent year-on-year in November.
This is the lowest level since February 2010, while lower than market forecasts and projections on 1:38 per Alliance Research at 1.3 percent.
Overall, the inflation rate constant below 1.5 percent in the second half of 2012 remained at 1.3 percent for the period September-November.
Source: Bernama under Inflation rate in Malaysia
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