CPI for June to double to 7.6%!!!!

Sunday June 22, 2008

Consumer prices on the rise

PETALING JAYA: The consumer price index (CPI) for May rose to a 22-month high of 3.8% year-on-year and economists expect the CPI for June to almost double.

JP Morgan Equity Research said core inflation, excluding food and transportation, had increased only slightly, while the main factor for the surge in the CPI was higher food prices.

However, it described the May CPI as “the calm before the storm” as it expected the June CPI to likely come close to doubling.

Factors driving the increase would be the recent rise in fuel prices after the Government raised the prices of petrol and diesel by 41% and 63% respectively, said JP Morgan.

Aseambankers Equity Research expected Malaysia’s monthly inflation rate to surge to 7.5% and 8% year-on-year in the June to December period, due to the higher fuel price and gas and electricity tariff hikes.

On the May inflation, it said the inflationary pressure was exacerbated by lack of enforcement by the authorities. It cited complaints by the public that controlled essential items like local super grade rice and flour were either not available or sold above their ceiling prices.