Thursday July 24, 2008
CPI for June surges to 7.7%
By V.P. SUJATA
PUTRAJAYA: The Consumer Price Index (CPI) for June spiked to a 27-year high of 7.7%.
This figure is slightly more than double the May CPI of 3.8%. The 7.7% is also the highest since April 1981 when the CPI was recorded at 10.8%.
The substantial rise in the price of petrol and diesel announced by the Government beginning June 5 is the main reason for the surge, said Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad.
He said the inflation would probably remain at 7.7% for July because it would see the impact of increase in the electricity tariff.
Reading a report by the Statistics Department, he said the CPI for January to June this year had also increased by 3.7% compared with the same period last year, which was from 105.1 to 109.
Index for food and non-alcoholic beverages for June compared to the same month last year showed high percentage change of 10.0% while the index for non-food increased by 6.7%.
From January to June, index for food and non-alcoholic beverages increased by 6.1% and non-food 2.6%, while among the groups with high weights were transport (+4%), and housing, water, electricity, gas and other fuels (+ 1.4%).
The 6.1% increase in the index for food and non-alcoholic beverages was the result of increases in the index for items such as milk, cheese, eggs, rice, bread, cereals, meat, vegetables, seafood, fruits, sugar, jam, honey, chocolate, confectionary and fats.
Among the food items that recorded notable increase in the June index were tomatoes, chicken eggs, rice, glutinous rice, imported beef, beehoon, dried noodles, watermelon, carrots, chicken and wheat flour.
Speaking to reporters at his office here yesterday, Shahrir said his proposal to have a dedicated agency to help efficiently distribute subsidised goods to rural folks would be submitted to the Cabinet in two to three weeks.
“There is not much we can do for the price pressures but more fine-tuning of a distribution system to ensure subsidised goods reach the target group is vital,” he said.
He said he was looking to increasing the number of food items on the price-control list to help the lower income group.
Food items on the list now were only general-purpose flour, cooking oil, white bread and rice.
The basket of goods for calculating the CPI is done twice in five years with the last one in 2005, he said, adding that it has to be expedited to be more reflective of the market conditions.
Shahrir said an average of 10 billion litres of diesel was being used annually with about 50% being subsidised by the Government.
Related story:
Inflation likely to remain high
Singapore raises 2008 inflation forecast to 6-7%
New Zealand central bank cuts key interest
Brazil increases interest rates amid resurgent inflation fears
Economic growth may be feeble in the second half
China says inflation in June falls to 7.1%
For the full report from the Statistics Department click here
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