Rahman Dahlan criticises Guan Eng over higher inflation claims - SELANGOR POST

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Saturday, April 22, 2017

Rahman Dahlan criticises Guan Eng over higher inflation claims

Datuk Seri Abdul Rahman Dahlan (pic) has hit out at Penang Chief Minister Lim Guan Eng for attempting to undermine Malaysia's economy.

The Minister in the Prime Minister's Department in charge of the Economic Planning Unit wrote in a Facebook posting on Saturday that Lim and his fellow opposition leaders "should learn some basic macroeconomics".

He said this as a response to the DAP lawmaker's previous claim that Malaysia's high inflation rate of 5.1% in March was caused by an autocratic and corrupt government lacking accountability and transparency in financial management.

Abdul Rahman explained that the high inflation rate in March 2017 was because of the low base effect as pointed out by the Statistics Department.

"Transport inflation rate in March 2016 was -8.2% when RON95 price dropped to as low as RM1.60 per litre. In March 2017, transport inflation increased by 23% as RON95 price was increased to RM2.29.

"This was why headline inflation rate hit 8-year high of 5.1% last month," he said.

In addressing Lim's second statement that inflation was high during the 1998 Asian financial crisis and the global financial crisis in 2008, Abdul Rahman said the 1998 inflation happened because of the sharp depreciation of the ringgit which pushed the cost of imported food higher.

"Government at that time increased the ceiling prices of cooking oil, chicken, flour, sugar and milk by 5% to 20% to mitigate the rising cost of imported food and essential items.

"In 2008, Malaysia didn't face a recession. The economy was still growing by 4.8% in 2008. Inflation rate was high in 2008 because of the sharp rise in crude oil price," he said.

Commenting on Lim's claims that inflation had hit the lower income groups proportionately harder than higher income groups, Abdul Rahman said inflation rate for those earning below RM3,000 was at 4.7% in March 2017 as compared to the nations 5.1%.

"This is because those in low income group spent more on basic necessities. Prices of some of which are controlled by the government. They also received BR1M that could offset the difference or rising prices of goods," he said.

He then stressed that Bank Negara policymakers have been monitoring the core inflation rate which has been stable at 2.5%.

"Lim Guan Eng and other opposition leaders should learn some basic macroeconomics before making silly accusations about Malaysia's economy on the basis of high headline inflation rate.

"Malaysia received RM59bil worth of foreign investment in 2016, an increase of RM23bil from RM36bil recorded in 2015. This shows that there's no economic crisis of confidence as alleged by Lim Guan Eng," he said.

He added that the opposition must stop trying to undermine Malaysia's economy by spreading fake news and making baseless allegations against the government and the nation's economy itself.

"If foreign investors and industry players believe the opposition, it will be a self-fulfilling prophecy," he added.

On Friday, the Statistics Department had said Malaysia's headline inflation rate hit 5.1% in March 2017, the highest in the last eight years.
Read more at http://www.thestar.com.my/news/nation/2017/04/22/rahman-dahlan-criticises-guan-eng-over-higher-inflation-claims/#ZCJsCL2r0Y742izx.99
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