PETALING JAYA: The Consumer Price Index (CPI) declined 0.2% in January 2021 to 122.1 from 122.4 in the same month of the preceding year, attributed to the decline in transport (-5.1%); housing, water, electricity, gas & other fuels (-0.7%); clothing & footwear (-0.4%); and restaurants & hotels (-0.1%) – which contribute 44.5% to the overall weight.
Chief Statistician Malaysia Datuk Seri Mohd Uzir Mahidin said that out of 552 items covered in the CPI, 340 items showed an increase in January 2021 compared with January 2020. On the contrary, 138 items declined, and 74 items were unchanged.
“Based on the performance of 552 items by category of goods and services, non-durable goods (296 items) is the category that experienced the most price increase with 208 items, 71 items decreased and 17 items were unchanged as compared to services, semi-durable goods and durable goods,” he said in a statement on Wednesday.
Nevertheless, food & non-alcoholic beverages increased by 1.5% to 136.1 compared with 134.1 in the corresponding month of the preceding year. This group makes up 29.5% of CPI weight. Similarly, miscellaneous goods & services inclined by 1.8%, followed by alcoholic beverages & tobacco (0.7%); health (0.7%); furnishings, household equipment & routine household maintenance (0.2%); and education (0.2%).
Uzir said the CPI without fuel increased 0.5% in January 2021 to 113.6 from 112.8 in the same month of the preceding year. The CPI without fuel covers all goods and services except unleaded petrol RON95, unleaded petrol RON97 and diesel.
The average price of unleaded petrol RON95 in January 2021 decreased to RM1.87 per litre compared with RM2.08 in January 2020. In addition, the average price of unleaded petrol RON97 decreased to RM2.17 per litre from RM2.58 while the average price of diesel declined to RM2.04 per litre from RM2.18 in the corresponding month of the preceding year.
The core index rose 0.7% in January 2021 compared with the same month of the previous year. Among the major groups which influenced the increase were miscellaneous goods & services (1.8%); food & non-alcoholic beverages (1.2%); health (0.7%); housing, water, electricity, gas & other fuels (0.5%); furnishings, household equipment & routine household maintenance (0.2%); and education (0.2%).
Although the year-on-year CPI decreased, the index on a monthly basis increased by 1.2% compared with December 2020. The increase was attributed to transport (3.7%); housing, water, electricity, gas & other fuels (2.6%); furnishings, household equipment & routine household maintenance (0.3%); and food & non-alcoholic beverages (0.2%).
Five states – Terengganu (0.3%), Selangor & Wilayah Persekutuan Putrajaya (0.2%), Kelantan (0.2%), Wilayah Persekutuan Kuala Lumpur (0.1%) and Pahang (0.1%) – surpassed the national CPI rate of -0.2% in January 2021 compared with January 2020.
All states except Sabah & Wilayah Persekutuan Labuan registered an increase in the index of food & non-alcoholic beverages. The highest increase was recorded by Pahang at 2.4%. This was followed by Selangor & Wilayah Persekutuan Putrajaya (2.2%), Terengganu (2.0%), Kelantan (1.8%), Perak (1.6%) and Negri Sembilan (1.6%).
In a note, UOB Research said the narrower decline in headline CPI further affirms its view of a return to positive CPI in first-quarter 2021, or as early as February.
“The uptrend in headline CPI this year will be driven by projected economic recovery amid the roll-out of vaccines that starts today (Feb 24), higher global commodity prices, and year-ago low base effects. Commodity prices are likely to edge higher on the back of improving demand in tandem with the economic recovery, ongoing stimulus support, supply disruptions, vaccine rollouts and pandemic containment that improves sentiment.”
Meanwhile CGS CIMB Research said it believes that inflationary pressure in the CPI basket will be transitory, driven largely by cost-push factors.
“The rapid retreat in downward pressure on headline CPI and relaxation of MCO restrictions have seen the markets trim expectations of further monetary policy easing.
“However, with a negative output gap, elevated unemployment rate and subdued core inflation persisting in 2021, we think the argument can still be made for one further 25 basis point Overnight Policy Rate cut to 1.5% at the March or May MPC meetings,” it said.
Source: The Sun Daily
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