Malaysia is facing inflationary pressures and the government is putting in place targeted measures to control rising food prices, the country’s minister for domestic trade and consumer affairs told CNBC.
Given the global trend, “we are going to be affected by inflation,” Alexander Nanta Linggi told CNBC’s “Squawk Box Asia” on Friday.
Malaysia’s consumer price index rose 3.2% in December 2021 from a year earlier, mainly due to higher food and fuel prices, according to government data released last week.
“National inflation for the period January to December 2021 showed a significant increase of 2.5% compared to a negative 1.2% for the same period in 2020,” according to a statement from the statistics department.
To ease inflationary pressures on prices, the government has taken steps to stabilize the prices of “what we consider essential foodstuffs” such as rice and meat, the minister said.
“Through grants and other forms of assistance,” the government has ensured that people “can buy groceries and basic necessities at affordable prices,” he added.
Malaysia last week announced it would set aside 680 million Malaysian ringgits ($162 million) to ensure price stabilization of essential goods, according to the media.
Linggi said the pandemic has fueled the country’s inflation problems.
“We have had Covid for the past two years, like everyone else in the world – and that too has disrupted food supply chains,” the minister said, adding that it has led to disruptions in the process of dealing with the disease. production.
As a result, the cost of production, especially for chicken farmers, “has increased significantly”, he pointed out.
Malaysia reported 5,439 new infections on Thursday, data from the Ministry of Health. About 78% of the country’s total population has been fully vaccinated, based on the data.
Linggi said Malaysia could maintain price controls on essentials for a longer period, “because there is so much pressure on food prices to rise”.
Despite concerns about inflation, The Central Bank of Malaysia maintained its benchmark interest rate to a record low of 1.75% on Thursday last week.
“For 2022, average headline inflation is expected to remain subdued as the base effect of fuel inflation dissipates,” the central bank said. “The outlook, however, continues to be subject to developments in global commodity prices amid risks of prolonged supply-related disruptions.”
The government is working with various ministries to take coordinated measures to bring inflation under control, according to Linggi.
“We are working closely in a cluster,” he said, adding that his ministry has submitted programs to meet the targets set by the Ministry of Finance to deal with “what affects the financial aspects of the country. “.