Headline inflation to spike in 2Q, to average 2.5-4.0 pct in 2021 – BNM Governor

Headline inflation measures the total inflation within an economy, including commodities such as food and energy prices. – File photo

KUALA LUMPUR (March 31): The country’s headline inflation is anticipated to temporarily spike to above 5.0 per cent in the second quarter of this year due to a lower base from low fuel prices in the corresponding quarter of 2020, and average to between 2.5 per cent and 4.0 per cent for 2021.

Headline inflation, which measures the total inflation within an economy, including commodities such as food and energy prices, was -1.2 per cent in the second quarter of 2020 where the country went into a complete lockdown to curb the spread of the Covid-19 virus.

“In terms of trajectory, headline inflation is anticipated to temporarily spike above 5.0 per cent in the second quarter of 2021 due to the lower base from the low domestic retail fuel prices in the corresponding quarter of 2020 before moderating thereafter,” BNM Governor Datuk Nor Shamsiah Mohd Yunus said today.

Last year, the pump prices in Malaysia were about RM1.37 versus RM1.95 this year.

Hence, the Governor, asserted that the spike is temporary.

The government has set the ceiling price for RON95 petrol at RM2.05 and RM 2.15 per litre for diesel. Core inflation, however, is expected to remain subdued, between 0.5 -1.5 per cent this year, she said.

Core inflation measures the change in average consumer prices after excluding from the index certain items with volatile price movements such as fuel price.

The outlook, however, is subject to global oil and commodity price developments. – Bernama

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