June’s subsidy cuts continued to affect the price level in August, and I suspect Ramadhan did as well. In any case, inflation for the month of August has accelerated:
You’ll note that it’s almost all the increase is coming from the “pain” components of food and transport, which are increasing at an overall rate of 0.5% a month.
The rest of the components (the “core” measure) are pretty flat, with clothing and footwear prices coming down (Ramadhan sales!) and hotels and restaurants up (Iftar sales!)
Overall inflation is increasing at about a 2.0% annual rate, which is still below Malaysia’s long term average of about 3.0% and BNM’s comfort zone. There’s therefore no monetary policy implication from these numbers, and I suspect there won’t be for at least a year or more down the road. BNM’s more concerned about asset price inflation right now rather than consumer inflation.
Technical Notes:
August 2010 CPI report from the Department of Statistics
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