MALAYSIA’S inflation in 2022 rose to 3.3% versus 2.5% in 2021, with the index points standing at 127.2 last year, compared with 123.1 in 2021, the Department of Statistics Malaysia said.

Chief statistician Mohd Uzir Mahidin said the increment was driven mainly by food and beverages (5.8%), restaurants and hotels (5%), transport (4.7%) and furnishings, household equipment and routine household maintenance (3.5%).

“The increase in inflation in 2022 was in tandem with the rise in majority commodity prices, the strengthening of the US dollar against major currencies and geopolitical tensions between Russia and Ukraine.

“A significant increase was recorded by all the subgroups in food and beverages, which registered a rise of between 2.9% and 8.6%,” he said in a statement in conjunction with the release of Analysis of Annual Consumer Price Index (CPI) 2022 report today.

“Moreover, incidents such as floods and landslides had also caused disruptions in the supply of agricultural products, leading to shortages of food supplies and increased prices.”

Uzir said the reopening of the tourism sector in April 2022 to international tourists from the neighbouring countries had an impact on inflation for restaurants and hotels, which posted a 5% increase last year, compared with 0.4% in 2021, whereas the highest inflation rate in 2022 was reported in August at 4.7%.

“This (the highest inflation rate in August) was due to the lower base effect in 2021 as a result of the electricity bill discount given to domestic consumers under the People’s Well-Being and Economic Recovery Package from July to September 2021,” he said.

Uzir also noted that inflation in 2022 was contributed by recreation services and culture (2.3%), miscellaneous goods and services (2%) and housing, water, electricity, gas and other fuels (1.8%).

“Despite the increases in the majority of items in the CPI basket, there were 17% of items that recorded decreases and remained unchanged, which had indirectly eased inflation,” he said.

“Among the goods that showed decreases in prices were ginger (-15.7%), rambutan (-3.9%) and belts (-3.6%), while the light rail transit fare, sewerage bill and magazine prices remained unchanged.”

Uzir said inflation for transport showed a slower increase, at 4.7%, in 2022 compared with 2021 (11%). This was caused by the subgroup of operation of personal transport equipment, which moderated to 5.8%, versus 14.1% in 2021.

“This was due to the end of the low base effect following the setting of the ceiling price of the RON95 petrol to RM2.05 per litre in March 2021,” he said.

“The average price of RON95 petrol in 2022 increased by 1.1% (RM2.05) year-on-year, compared with 21.2% (RM2.03) in 2021.

“Nevertheless, the average price of RON97 petrol rose significantly to RM3.97 per litre from RM2.65 in 2021.”

Uzir also said inflation without fuel, which covers all goods and services except RON95 and RON97 petrol and diesel, was up 3.2% in 2022 versus 1.2% in 2021.

“The core inflation (which) includes all goods and services except volatile items like fresh food as well as administered prices of goods and services increased to 3%, compared with 0.7% in the previous year,” he said.

On inflation at the state level, Uzir said all states and territories recorded an upward trend with two states and a territory posting an increase above the national level of 3.3% in 2022.

He said the highest surge was registered by the Federal Territory (FT) of Putrajaya (7.3%), Selangor (4.2%) and Johor (3.4%) while FT of Labuan recorded the lowest rise of 2.4%.

For food and beverages inflation, Putrajaya posted the highest increase of 7.7%, followed by Selangor (7.4%), Johor (6.1%) and Penang (6%), he said, adding that other states and territories recorded rises below the national food and beverages inflation of 5.8% in 2022.

“This expansion was mainly due to the price increase for chicken, eggs and oil in 2022, (caused by) the geopolitical tension between Russia and Ukraine, which are among the exporters of raw materials for food products to Malaysia such as fertiliser and wheat,” he said. – Bernama, May 17, 2023.