KUALA LUMPUR: With Malaysia’s Producer Price Index (PPI) remaining above the consumer price index (CPI) for the 15th consecutive month, the upward price pressures affecting the producers are likely to push consumer prices higher, said MIDF Research (MIDF).
Yesterday, the Department of Statistics Malaysia (DOSM) said Malaysia’s PPI for local production, which measures costs of goods at the factory gate, recorded a two-digit increase for the first time this year at 11.6 per cent in March 2022.
“The acceleration in PPI inflation to a four-month high of +11.6 per cent year-on-year (y-o-y) in March 2022 had exceeded expectations.
“However, the sharper rise in prices of primary goods, particularly agriculture, forestry and fishing (+24.9 per cent y-o-y) and mining goods (+28.2 per cent y-o-y) was generally in line with our expectation in view of the high commodity prices,” MIDF said in a note today.
The research house noted that the manufacturing PPI also rose faster at +8.9 per cent y-o-y as factories faced challenges from rising input costs and supply constraints.
“Meanwhile, the sharper rise in agriculture PPI points to a continued uptrend in food prices as producers will pass more cost increases to their customers.
“In the coming months, we anticipate the high PPI inflation to continue as producers have to bear rising input costs amid supply challenges and high commodity prices,” it added. — Bernama