Inflation likely to stay modest
BANK Negara Malaysia (BNM) expects inflation to remain modest at an average of 2.0 to 2.5 per cent in 2010, with improving economic conditions and possible adjustments to administered prices.
If there are no more price revisions and inflation-related external developments, inflation in Malaysia will remain contained, it says.
Despite the expected improvement in economic activity, demand conditions are not expected to exert pressure on global inflation in 2010. Demand pressures on domestic prices are expected to be manageable.
Sustained consumer confidence, the accommodative monetary conditions and the government's stimulus packages will likely support consumption and investment activity by households and businesses.
Although the output gap is recovering from low levels, the impact on price pressures is likely to be limited.
A comprehensive review on the existing subsidies on essential items is also being undertaken which could generate some upward adjustment on domestic headline inflation.
Core inflation is likely to exhibit a modest upward trend and is not expected to be a source for policy concern.
If there are no more price revisions and inflation-related external developments, inflation in Malaysia will remain contained, it says.
Despite the expected improvement in economic activity, demand conditions are not expected to exert pressure on global inflation in 2010. Demand pressures on domestic prices are expected to be manageable.Sustained consumer confidence, the accommodative monetary conditions and the government's stimulus packages will likely support consumption and investment activity by households and businesses.
Although the output gap is recovering from low levels, the impact on price pressures is likely to be limited.
A comprehensive review on the existing subsidies on essential items is also being undertaken which could generate some upward adjustment on domestic headline inflation.
Core inflation is likely to exhibit a modest upward trend and is not expected to be a source for policy concern.
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