After the recent increase of fuel, electricity and sugar prices in Malaysia, Maybank Investment Bank (IB) Research has forecasted that petrol price will be hiked again in 2014. The timing and the amount of the hike is still uncertain.
“The timing and quantum of the fuel price increase remains a question, hence our range forecast for 2014 inflation rate, which assumes another 20 sen per liter hike either early or middle of next year,” According to Maybank Investment Bank (IB) Research
The prediction by Maybank Investment Bank (IB) Research is also in line with forecast from World Bank Economist Dr Frederico Gil Sander. “Now if you look at the numbers it’s not clear whether they’re anticipating another round of subsidy rationalization in 2014 or not. It appears that there may have another round, If you look at allocation, for fuel allocation is expected to decline quite significantly next year. Which I think signals probably some fuel subsidy rationalization in order for targets to be met,” he said.
The last around of fuel hike on September was part of government plan to reduce subsidy. This is part of the effort to reduce fiscal deficit when Ficth has downgraded Malaysia’s credit rating although these moves have been linked with spiraling cost of living in Malaysia.So far the research house has accurately predicted the electricity tariff hike as of 1st January 2014.