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Tuesday, October 4, 2022
HomeNewsAnalysts say rising prices may continue until early 2023

Analysts say rising prices may continue until early 2023

Despite the rounds of rising prices we are seeing now, it seems that the waves of rising prices will not end so soon and analysts are predicting that it will continue until early next year.

Speaking to Sinar Harian, Universiti Putra Malaysia (UPM) Putra Business School economic analyst Associate Professor Dr Ahmed Razman Abdul Latiff said this expectation was made based on the expected decline in Gross Domestic Product (GDP) and global economic development.

Razman explained that the declining GDP which contributed to the weakness of the ringgit would increase the price of goods, especially food whose supply chain depends on imported materials.

“Our dependence on some imported goods will cause a high cost of living. This has an impact, for example on chicken feed that has to be imported.”

Source: FMT

“When the cost of chicken feed is high, the price of raw chicken and eggs increases in the local market,” he was quoted as saying by the Malay daily.

Meanwhile, Razman also said the increase in monthly food prices was expected to remain high at more than 5% starting the second half of 2022.

He said the reopening of the economy in China after the end of the its ‘lockdown’ also contributed to the increase in the price of goods until early next year.

“The reopening of China’s economy is expected to begin in the third and fourth quarters of 2022. When this happens, the Chinese people will start spending.”

“This will cause the price of food items to remain high,” he said.

Source: The Rakyat Post

At the same time, Razman predicts that the job market is expected to remain stable despite the decline in GDP in the second half of this year, but the recovery of income growth among Malaysian employees would be disrupted.

“The decline in the country’s GDP is partly due to internal factors such as the expected increase in the Overnight Policy Rate (OPR) and global political uncertainty,” he said.

Meanwhile, Malaysian Institute of Economic Research (MIER) Head of Researcher Dr Shankaran Nambiar said Malaysians are not only affected by the increasing prices of basic foods, but also loan repayment of assets such as vehicles and houses.

He said the situation of uncertainty in the price of the goods was expected to last until 2023 although there were optimistic parties who predicted that it would subside at least by the end of this year.

Shankaran explained that apart from the Ukraine-Russia war crisis, there is a potential for the United States (US) to experience a recession next year.

“The US economy is huge, so the effects will be felt around the world. If the demand from the US is less, it will affect Malaysia’s total exports, indirectly affecting the country’s GDP,” he said.

He then suggested that the government continue to subsidise certain goods to the people to reduce the people’s spending pressure as a short-term measure, while for long-term measures, the government must increase the production and supply of food stuff in the country.

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