Price pressures on local producers to ease - MIDF Research
30 Sep 2022 10:51am
Image for illustrative purposes only - 123RF
Consequently, the consumer price index (CPI) inflation outlook will eventually ease as firms may decide to stop raising selling prices in view of reduced producer price index (PPI) inflation and easing cost pressures, it said in a note today.
"Malaysia’s Producer Price index (PPI) rose by 6.8 per cent year-on-year (y-o-y) in August 2022, ) - easing to the slowest increase since April 2021, which can be attributed to a decline in the PPI for crude material.
"The PPI for crude material had contracted for the first time since January 2021 as a result of the reduction in prices of non-food materials," it said.
MIDF Research said the PPI inflation for intermediate materials also softened to +10.3 per cent y-o-y although the sustained double-digit growth signals continued pressures from rising input prices in the manufacturing sector.
The research firm also noted that the correction in the global crude oil and gas prices had led to a sharp moderation in PPI inflation for the mining sector (+5.8 per cent y-o-y), the slowest increase in 17 months.
Meanwhile, the easing inflation for raw materials and intermediate goods (at +9.4 per cent y-o-y) led to milder PPI inflation for the manufacturing sector.
"Producer prices in the agriculture forestry and fishing industry fell by -10.6 per cent y-o-y, the second consecutive month of declines, tracking the lower global commodity prices.
"Water supply and electricity and gas supply registered an increase of +3.0 per cent y-o-y and +0.9 per cent y-o-y respectively which contributed to the positive PPI inflation in August 2022," it added. - BERNAMA
