KUALA LUMPUR, Feb 28 — The low Producer Price Index (PPI) is an early indicator of a moderation in inflation which helps to ease the cost of living and increase demand to rejuvenate the domestic economy, according to the Economy Ministry.
The ministry said this situation can be observed by the lower rate of inflation in 2023 at 2.5 per cent compared with 3.3 per cent in the preceding year.
“However, a continuous fall in PPI can lead to deflation so efforts will continue to be made to lift demand once more, including boosting exports and encouraging investments,” it said in a reply to an oral question posted on the Parliament’s website.
The ministry said the level of the PPI will always be monitored by the government, just like other macroeconomic indicators such as the consumer price index, unemployment rate and gross domestic product.
Yesterday, the Department of Statistics Malaysia said the fall in Malaysia's PPI, which measures prices of goods at the factory gate, has narrowed, declining a marginal 0.6 per cent in January 2024 versus negative 1.3 per cent in December 2023.
— Bernama
