Inflation in Malaysia recorded 1.4% in 2001

Inflation in Malaysia recorded 1.4% in 2001

Associated Press, Kuala Lumpur

Malaysia's recorded an inflation rate of 1.4 percent in 2001, well within the government's target of below 2 percent, the government reported Wednesday.

The moderate inflation figure came as Malaysia's economy received confirmation of more bad news in manufacturing sales, which slumped 17.2 percent year-on-year in November as the global slowdown continues to bite.

Economists said the manufacturing sales figure was within expectations and that they expect a months-long decline to bottom out soon.

Economists had expected moderate inflation for 2001 in light of the economic slowdown in Malaysia, the rest of the region and the United States, the Southeast Asian country's largest trading partner.

The government's Statistics Department attributed the inflation rate to higher consumer prices in all categories - apart from clothing and footwear, as well as recreation and entertainment, which declined by 2.6 percent and 0.1 percent respectively.

The consumer price index in December 2001 rose 1.2 percent from the same month in 2000 and 0.1 percent from November. The slight on-month rise was attributed to 0.3 percent rise in the food category and a 0.1 percent increase for medical and health care expenses.

In November, consumer prices were up 1.5 percent from a year earlier and 0.8 percent from October.

The manufacturing sales slump followed manufacturing output data which showed output fell 12.6 percent year-on-year in October and 7.1 percent in November.

Manufacturing sales in October dropped 12.9 percent on year, but rose a non-seasonally-adjusted 0.4 percent from September. November sales fell a non-adjusted 5 percent from October.

Economists have said they expect the declines to bottom out over November, December and January as there are some signs of recovery in global demand for electronics, Malaysia's key export.

Like other large exporters of electronics in Asia, Malaysia has been hard hit by the slowdown, which has pushed some regional economies into recession.

Thousands of people have lost their jobs in microchip factories in Singapore and Malaysia as production plummets in line with falling demand.

Malaysia's statistics agency said that the number of employees in the manufacturing sector fell 6.2 percent year-on-year to 985,213 people at the end of November 2001.

For the first eleven months of the year, manufacturing sales fell 6.5 percent to 285.6 billion ringgit (US$75 billion) from 305.3 billion ringgit ($80 billion) in the year-earlier period.