CPI up moderately on food and non-food items – within expectations
PETALING JAYA: As suspected, the
consumer price index (CPI) for March released yesterday did not bear surprises,
with a moderate increase of 2.1% to 104.5 from a year ago.
In earlier
reports, it was expected that the CPI would increased by only 2.1% from a year
earlier, based on the median estimate of seven economists surveyed by Bloomberg.The small increase is mainly due to food and non-food items.
The index for food and non-alcoholic beverages and non-food for the month of March showed increases of 2.9% and 1.7% respectively when compared with the same month in 2011.
When compared with February figures, the CPI remained unchanged at 104.5. The index for food and non-alcoholic beverages and non-food remained unchanged since February too.
The CPI for the period January to March this year increased by 2.3% to 104.5 compared with that of 102.2 in the same period last year.
The increase for the three-month period was brought about by increases observed in the indices of all the main groups except for communication, clothing and footwear.
Notable increases among these main groups with high weights were food and non-alcoholic beverages which increased 3.6%.
The index for alcoholic beverages and tobacco remained unchanged at 104.6.
Citigroup Inc senior economist Kit Wei Zheng said in a report received right before the Department of Statistics released inflation data that the CPI inflation could stay near 2.1% to 2.3% in the next few months but could tick up in the second half of the year.
He said that a few sources of pipeline inflation pressures could build from the second half such as a fiscal lift to domestic demand which could add to core inflation pressures, implementation of Economic Transformation Programme (ETP) mega projects, higher commodity prices and latent pressure building in subsidised price-administered items which are still insulating consumers from producer cost pressures.
He noted that there were chances for a rate hike from the end of this year to early 2013, after the next few Monetary Policy Committee meetings when Bank Negara is expected to maintain the Overnight Policy Rate at 3%.
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