HYPERINFLATION has never occurred in Malaysia, the Economy Ministry said.

It said the highest inflation rate ever recorded in Malaysia was 17.3% in 1974.

“The inflation hike that year was caused by the global crude oil price crisis.

“Due to the diversity of economic resources, the country is not exposed to any particular cause for a sudden increase in inflation,” the ministry said in a published reply yesterday on the parliament website, to a question from senator Abdul Nasir Idris who asked Economy Minister Rafizi Ramli how prepared the government was to avoid hyperinflation due to floated chicken prices, the abolition of diesel subsidies and the hikes in rice prices.

The inflation rate was measured via the Consumer Price Index (CPI) to assess the change in the average price of items in a fixed basket of goods and services for a specific period of time.

The optimal inflation rate is usually 2-3%. Based on a World Bank report, hyperinflation occurs if the inflation rate exceeds 50%.

The Economy Ministry said the government would constantly monitor issues  involving the people’s interests, especially in relation to rising living costs and inflation.

“The government decided to end subsidies and chicken price controls on November 1 after taking into account easing food inflation.

“The move to revise the diesel subsidy is not expected to have a major impact on inflation since the proposal to revise the diesel subsidy only involves private vehicles,” it said.

The Economy Ministry said to ensure hyperinflation did not occur due to the increase in rice prices, the Agriculture and Food Security Ministry announced intervention measures including the Special Local White Rice Programme as a short-term measure to overcome the lack of local supply.

“Based on the country’s stability and strong and resilient economic base, the government is confident it will be able to manage the economy better to preserve the wellbeing of the people.

“This is supported by the structured policies announced such as the 12th Malaysia Plan mid-term review, the New Investment Policy, the New Industrial Master Plan 2030 and the National Energy Transition Roadmap, which will attract more investments to boost the national economy,” it said. – Bernama, November 28, 2023.