PETALING JAYA: Bank Negara Malaysia is forecasting headline inflation to range between -1.5% to 0.5% in 2020, mainly reflecting significantly lower global oil and commodity prices.
In its Economic and Monetary Policy Review, the central bank noted that without the downward pressure from lower global oil prices, underlying inflation is projected to remain positive averaging between 0.8% to 1.3% reflecting subdued demand pressures, expectations for a negative output gap, as well as weak labour market conditions.
Meanwhile, private consumption is also expected to be affected by the soft labour market, as well as mobility restrictions and subdued sentiments.
‘Nonetheless policy measures introduced in the two economic stimulus packages will increase disposable income and improve cash flow for households.
“In additon to household spending, these broad-based measures will facilitate a gradual recovery in private consumption as labour market conditions evenutally stabilise following the projected improvement in global and domestic economic activities,” it said.
Meanwhile, monetary policy in 2020 will focus on providing support to domestic economic growth in an environment of subdued price pressure, the central bank noted.
source https://www.thesundaily.my/business/2020-headline-inflation-to-range-from-15-to-05-bnm-ED2207024
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