KUALA LUMPUR: Full-year inflation is likely to grow by 3.2 per cent owing to the latest petrol pump price increase, AmResearch Sdn Bhd said.
On a year-to-date basis, inflation grew by 3.3 per cent year-on-year as at end-August, it added.
Consumer prices, on the other hand, are expected to rise further next year especially from April onwards when the Goods and Services Tax GST takes effect, the firm noted.
The government yesterday announced a cut in fuel subsidy, effectively hiking the retail prices for RON95 petrol and diesel by 20 sen per litre from today.
AmResearch said the subsidy cut will save the government some RM830 million, or 0.1 per cent of the country’s gross domestic product, this year.
Based on its full-year GDP growth assumption of 5.7 per cent for 2014, the firm said the overall budget shortfall could come in lower at 3.3 per cent of GDP versus 3.9 per cent of GDP in 2013.