Global commodities causes 80% food components in F&B to surge , says Stats Dept

KUALA LUMPUR - Malaysia’s inflation increased by 2.5 per cent driven by the rising food and fuel prices in 2021, the Statistics Department has said.

Chief Statistician Datuk Seri Mohd Uzir Mahidin said 184 food items of the overall 552 items in the Consumer Price Index (CPI) "basket” recorded an increase.

He said the increase was also higher as compared with 0.7 per cent recorded during the pre-pandemic year of 2019.

"The Covid-19 pandemic has affected the daily lives of the community.

"However, vaccination programmes have helped restore business confidence and further increase consumer confidence to go out shopping,” he said in a statement following the release of the Analysis of Annual CPI, 2021 report today.

The report contains a detailed analysis of the inflation time series from 2010 to 2021 by 12 main groups of goods and services.

Additionally, he said the lifting of interstate travel bans and restoration of all economic sectors starting Oct 11, 2021 contributed o the country’s economic recovery, especially in the distribution and retail sectors "Overall, the 2.5 per cent increase was contributed by the index of transport (11 per cent), food and beverages (F&B) (1.7 per cent), furnishings, household equipment and routine household maintenance (1.6 per cent) and housing, water, electricity, gas and other fuels (1.5 per cent) which contributed 72 per cent to the total CPI weight,” he said.

Uzir said a total of 80 per cent of food components in the F&B have increased.

"The increase in global commodities prices had impacted the food inflation. The rise of chicken prices above the 2020 average price was due to the rise of price of animal feedstuff,” he said.

He said the lack of import supply, Movement Control Orders (MCOs), as well as the closure of the national border, have influenced the fluctuation of prices in the local market.

On transportation inflation, Uzir said the double-digit increase of 11 per cent was due to the base effect of the setting of ceiling price for petrol RON95 (RM2.05 per litre) and diesel (RM2.15 per litre) starting March 2021.

Additionally, he said the discontinuation of the monthly electricity bill discounts given to domestic consumers under the National People’s Well-Being and Economic Recovery Package (PEMULIH), which was implemented for three months and ended in September 2021, also exert upward pressure on the national inflation for 2021.

"All states registered increases in inflation with seven states showed an increase above the national inflation level of 2.5 per cent. The highest increase was recorded by Terengganu (3.4 per cent),” he said.

He said the increase was mainly due to the higher prices of chicken, eggs, cooking oils and fish and seafood in 2021 compared with the preceding year.

Meanwhile, he said inflation for the group income below RM3,000 increased 2.2 per cent in 2021 compared with a contraction of one per cent in 2020 with the transport group contributing the highest increase of 13.3 per cent as against a negative 12 per cent recorded in 2020.

"In 2021, core inflation was slower at 0.7 per cent as compared to 1.1 per cent recorded in the previous year,” he said.

He said the highest increase in core inflation was mainly contributed by the furnishings, household equipment and routine household maintenance group of 1.6 per cent. On inflation in all ASEAN countries, he said 2021 inflation registered increases between 1.2 per cent to 3.9 per cent.

He said the Philippines recorded the highest inflation rate of 3.9 per cent while Thailand recorded the lowest inflation at 1.2 per cent.

"Singapore, Vietnam, Indonesia and Brunei recorded a lower increase in inflation at 2.3 per cent, 1.9 per cent, 1.6 per cent and 1.5 per cent respectively,” he said.