INFLATION eased to 3.8% in December 2022, down from 4.0% the previous month, thanks to a slower increase in the price of food and non-alcoholic beverages, said the Department of Statistics Malaysia.

Overall, inflation for 2022 increased to 3.3%, compared to 2.5% recorded in 2021, chief statistician Mohd Uzir Mahidin said.

During the last month of 2022, the consumer price index (CPI) stood at 129.2 against 124.5 in the same month of the preceding year.

The food and non-alcoholic beverages group grew 6.8% in December 2022, down from 7.3% the previous month, followed by transport (4.9%), and furnishings, household equipment and routine household maintenance (3.7%), which also recorded a slower increase against November 2022.

However, restaurants and hotels continued to show an increase of 7.4%, against 7.0% in November 2022.

There were also increases in recreation services and culture (2.4%); miscellaneous goods and services (2.3%); and housing, water, electricity, gas and other fuels (1.5%).

Education and health also registered an increase of 1.4% and 1.3% respectively.

Alcoholic beverages and tobacco, and clothing and footwear posted marginal increases of 0.7% and 0.4% respectively.

For 2022, the increase was mainly attributed to food and non-alcoholic beverages (5.8%), restaurants and hotels (5.0%) and transport (4.7%).

“The conflict between Russia and Ukraine and the global food price increases in 2022 contributed to the increase in inflation for this year.

“Meanwhile, inflation for the fourth quarter of 2022 inclined 3.9% to 128.9 against 124.1 in the same quarter of the preceding year,” he said in a statement.

On a quarterly basis, inflation increased by 0.6% compared to the third quarter of 2022.

Monthly headline inflation in December 2022 increased moderately to 0.2% compared to 0.3% in November 2022, mainly driven by the restaurants and hotels (0.7%), and food and non-alcoholic beverages (0.5%) sectors.

“The food and non-alcoholic beverages group, which contributes 29.5% of total CPI weight, recorded a moderate increase, compared to the previous month.

“The increase in this group was mainly attributed to the component of food at home, which recorded a moderate increase of 4.9% compared to 5.8% in November 2022,” he said.

Uzir highlighted that the implementation of the festive season maximum price scheme (Christmas) from December 23-27, 2022, and the setting of the ceiling price for cooking oil in bottles helped ease inflationary pressure from this sector.

Meanwhile, transport inflation showed a slower increase of 4.9% year-on-year in December 2022 (November 2022: 5.0%), due to the lower increase in the average price of the RON97 unleaded petrol.

The average price of RON97 unleaded petrol increased by 20%, influenced by the increase in the price of Brent crude oil by 8.9% to US$80.90 (RM349) a barrel in December 2022.

Four states recorded increases above the national inflation level of 3.8%: Putrajaya (7.9%), Selangor (4.5%), Sarawak (4.1%), and Johor (3.9%).

Kedah recorded the lowest increase of 2.2%.

Meanwhile, inflation for the income group below RM3,000 increased 3.6% from 125.3 in December 2021 to 129.8 in December 2022, due to the increase in food and non-alcoholic beverages group at 6.1%.

In addition, inflation for restaurants and hotels also went up 7.8%, followed by furnishings, household equipment and routine household maintenance (4.2%); transport (2.6%); miscellaneous goods and services (2.2%); and recreation services and culture (1.8%).

Uzir said core inflation, which measures changes in the prices of all goods and services – without taking into account the volatile prices of fresh food as well as administered prices of goods by the government – registered an increase of 4.1% year-on-year in December 2022.

The highest increase was recorded by food and non-alcoholic beverages group with 8.1%, followed by the restaurants and hotels group (7.4%); transport (7.3%); furnishings, household equipment and routine household maintenance (3.7%), and recreation services and culture (2.4%).

Compared to other Asian neighbours, Malaysia’s of 3.8% was lower than the Philippines (8.1%), Thailand (5.9%), Indonesia (5.5%), and South Korea (5.0%). – Bernama, January 20, 2023.