KUALA LUMPUR, July 1 -- May's producer price index (PPI), which declined to its lowest level since September 2015, indicates that Malaysia’s inflationary pressure will remain low throughout 2020, according to MIDF Research.
Malaysia’s PPI declined further to -5.5 per cent year-on-year in May 2020 from -5.1 per cent year-on-year in April 2020.
The input prices of manufacturing, which made circa 81 per cent of the total PPI, fell marginally by - 0.8 per cent year-on-year compared with a 0.1 per cent year-on-year increase in the preceding month, dragged down by declining prices of coke & refined petroleum products (-7.6 per cent), rubber & plastics products (-2.1 per cent) and machinery & equipment (-1.9 per cent), among others.
It was also influenced by prices of manufacturing of food products and computer, electronic & optical products, which increased at a softer pace of 2.9 per cent year-on-year and 2.7 per cent year-on-year, respectively.
The PPI of mining and electricity recorded a deflation of -52.7 per cent year-on-year and -0.2 per cent year-on-year respectively, while that of agriculture, forestry & fishing moderated further to 5.5 per cent year-on-year.
Meanwhile, AmBank Research opined the downwards pressure on inflation remains, as much depends on whether there will be a second round of COVID-19 infections.
"Assuming there is no second wave, the support from fiscal and monetary measures added with the opening up of the economy should help put a lid on the downside," it said.
Malaysia National News Agency
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