Malaysia inflation eases to 3.7 pct: official data
Malaysia's inflation eased to 3.7 percent year-on-year in February from 3.9 percent a month earlier, official data showed Friday, as demand falls in the slowing economy.
The Department of Statistics said the consumer price index for January to February had risen by 0.2 percent.
"The fall in inflation is expected due to slower growth," Wan Suhaimi Saidi, an economist with Kenanga Investment Bank, told AFP.
"Going forward, inflation will slow down due to falling consumer demand and this gives room for the central bank to further cut interest rate," he added.
Malaysia recently said that its economy could contract by 1.0 percent in 2009 despite a massive 16.2 billion dollar stimulus package, dumping its earlier target of 3.5 percent growth.
Inflation jumped to a 26-year high in August at 8.5 percent, driven up by the high cost of food and fuel following a 41-percent fuel price hike.
Malaysia's central bank cut its key interest rate by 50 basis points to 2.0 percent last month, saying the troubled global outlook had raised the risk of a recession in 2009.
The surprise decision represented an unprecedented third consecutive cut in interest rates, as Malaysia attempts to stave off a slowdown with official data showing steep declines in exports and industrial production.
The central bank had said that with inflation on a moderating trend, the main task was to support domestic demand until the global economy shows signs of recovery.
http://news.my.msn.com/regional/article.aspx?cp-documentid=2881044
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