SHAH ALAM - Food prices are expected to continue to rise during Ramadan and Hari Raya Aidilfitri celebrations according to CGS-CIMB Research, who state the projected increase as based on the surge in demand that will occur during the month.
The firm also said the Department of Statistics Malaysia (DOSM) stated that the price of chicken has increased by eight per cent.
"However, the out-of-home food sub-component has moderated due to the launch of Rahmah Menu by the government which is a popular initiative across the country to encourage traders to sell food at cheap prices.
"So, in order to limit the potential for price increases, the government recently launched the Rahmah Sale, an initiative from March 23 to April 22, offering up to 40 per cent discounts on more than 150 basic necessities," he said while quoting a report from the Dagang News news portal today.
In addition, CGS-CIMB stated that the government also plans to announce a holiday price control scheme similar to the one that was launched during the previous festive season.
Last February, the Consumer Price Index (CPI) rose 0.2 percent month-on-month and 3.7 percent year-on-year in addition to higher than the firm's and Bloomberg's expectations.
Food and food sub-components at home were the main catalysts increasing 5.8 percent driven by the subgroup of meat (nine per cent) and rice (6.6 per cent).
Earlier, the CPI which measures the rate of inflation in Malaysia remained at 3.7 percent in February and was driven by a 7.4 percent increase in prices at restaurants and hotels and a seven percent increase in food prices.
However, a slower increase occurred for the transport group which was 3.7 percent compared to last January (four percent) to some extent offset inflation rather than continue to increase.
The firm maintains the country's inflation forecast at three percent this year.