Malaysia’s June inflation rate seen easing after GST scrapped: poll

The new government scrapped the 6 percent consumption tax on June 1.
Reuters

KUALA LUMPUR – Malaysia’s annual inflation rate likely eased to 1.3 percent in June from 1.8 percent the previous month, thanks to the withdrawal of a goods and services tax (GST), a Reuters poll showed.

The 10 analysts in the Reuters poll gave estimates for June inflation ranging from 0.6 percent to 1.9 percent.

The new government led by Prime Minister Mahathir Mohamad, put in office after the May 9 general election, scrapped the 6 percent consumption tax on June 1.

It had been in effect for three years.

Economists said the removal of GST likely dampened inflation in June, despite higher transport and food prices during the Muslim fasting month of Ramadan and subsequent Eid al-Fitr celebrations.

Amid slowing inflation and steady growth, Malaysia’s central bank left its key interest rate unchanged at 3.25 percent at a policy meeting on July 11.