Inflation hits 7.7%, highest in 26 years

Malaysia's annual inflation rate jumped to a 26-year high of 7.7 percent in June due to a substantial rise in fuel prices, according to official data released today.
Nor Mohamed Yakcop, second finance minister, had already said that a 41-percent hike in subsidised fuel prices last month was set to boost inflation in June and July.
The figure came as something of a surprise as economists had predicted June inflation of 6.6 percent.
Economists now expect the central bank to raise interest rates by 25 basis points at the end of July to counter the jump in inflation.
Transport prices increase 20%
Malaysia's key interest rate now stands at 3.50 percent.
Transport prices rose 19.6 percent in June as compared with a year ago, while food and non-alcoholic beverages rose 10 percent.
In the first half of the year, consumer prices rose 3.7 percent from the same period the year before.
Prime Minister Abdullah Ahmad Badawi last month announced a deeply unpopular 41 percent increase in petrol prices to cut the country's subsidies bill, which would have reached 17 billion dollars this year.
- AFP

tunku : some will say its global phenomenon but if our government had increased the petrol gradually the inflation won't be as high as this. here are some measures that they could have tried. i hope the government will not increase the interest rate as this will worsen the burden of the majority of malaysian.they won't be able to buy house , car etc. they should maintain the rates as its consider high too for the current economy scenario.don't give reason that by increasing the interest rates,people will save more money, THERE'S NO MANY TO SAVE for the majority of Malaysian.