Malaysia: Inflation continues to rise amid higher fuel prices
January 19, 2011
In December, consumer prices added 0.4% over the previous month, which came in above November's 0.3% price climb, but was in line with market expectations. The main drivers behind the monthly price increase were higher prices for transport (+1.6% month-on-month), brought on by escalating energy prices together with further cuts in fuel subsides. The government began cutting subsidies for fuel and sugar in July 2010 in an attempt to eliminate market distortions and moderate the budget deficit. Owing to the strong monthly price increase, annual inflation accelerated from 2.0% in November to 2.2% in December. As a result, annual average inflation for the full year 2010 reached 1.7% (November: 1.6%).