PETALING JAYA: Malaysia’s producer price index (PPI) fell by 2.5% year-on-year (y-o-y) for the first half of 2023 (H1 2023), according to the statistics department.
In a statement today, the department said the decline in wholesale inflation was due to the gradual drop in prices of commodities such as crude oil, natural gas and crude palm oil since January.
The country’s PPI decreased by 4.8% year-on-year (y-o-y) in June, down 0.2 percentage points compared to May.
On a monthly basis, the PPI dropped 0.3% month-on-month (m-o-m), improving 0.1 percentage point compared to May (0.4% m-o-m).
The PPI measures wholesale inflation by tracking the average changes in prices received by domestic producers for their output.
From a sectoral comparison, the agriculture, forestry and fishing industry registered the largest annual PPI decline, dropping 20.4% y-o-y in June (May: -27.2% y-o-y).
Prices of goods in the sector have dropped continuously for six consecutive months.
Chief Statistician Uzir Mahidin attributed the slide to the decrease in the oil palm fresh fruit bunches (FFB) index by 34.4% in June.
The second-largest inflation decline was observed in the mining sector, which fell by 16.6% y-o-y in June (May: -10.7% y-o-y).
Uzir said the decrease was caused by the 23.3% decline in the extraction of crude petroleum index.
Meanwhile, the manufacturing sector’s PPI was down 1.8% y-o-y, with the manufacture of food products index falling by 9.9%.
“However, the manufacture of computer, electronic and optical products index rose by 7.5%, explaining the marginal movement of the manufacturing sector,” Uzir clarified.
For the utility sector, both the water supply and electricity & gas supply indices went up 3.2% and 1%, respectively.
In the global context, Uzir said that wholesale inflation in selected countries remained modest.
“The US PPI inched up 0.1% as compared to 0.9% in May 2023, the smallest growth since August 2020.
“China’s producer price fell for the ninth consecutive month, down by 5.4% from a year earlier as compared to a 4.6% drop in the previous month,” he said.
Similarly, India’s producer inflation contracted by 4.1% (May: -3.5%) while Japan’s PPI growth slowed down to 4.1% compared to 5.2% in the previous month.
