Govt Analysing Cost-push Inflation Risk Amidst Middle East Conflict

KUALA LUMPUR, March 5 (Bernama) -- The government is studying the risk of cost-push inflation in light of the ongoing conflict in the Middle East that has driven up oil prices and fuel costs, said Deputy Economy Minister Datuk Mohd Shahar Abdullah.

He said the conflict in the region, especially given Iran’s position as a major global oil producer, could exert pressure on energy prices and increase global trade costs.

“(Tensions in the Middle East) certainly have the potential to exert pressure on fuel prices. As trade activities involving imports and exports depend heavily on logistics, higher fuel costs could translate into higher prices — this is what we refer to as cost-push inflation.

“The government is closely monitoring these developments and obtaining verified information from various sources to determine whether the impact will spread more broadly,” he said during the question-and-answer session in the Dewan Negara today.

Mohd Shahar was responding to a supplementary question from Senator Tiew Way Keng on Malaysia’s reliance on Middle Eastern markets and the possible implications for the domestic economy.

“The nation’s inflation rate is currently still under control. These developments are being monitored, and the government remains committed to ensuring the well-being of the rakyat,” he added.

-- BERNAMA