How Will Najib Tackle Runaway Inflation in 2014? -Dr. Jeffrey

Kota Kinabalu:     “While everyone is focused on the recent policies of the government resulting in total price hikes in almost every item, the ringgit has been depreciating alarmingly almost unnoticed by most ordinary man in the street” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief, noting that the Ringgit has fallen by one of the biggest margin in 2013 since the 1997 economic meltdown.

Based on statistics from Bank Negara Malaysia of the rates from the Interbank Foreign Exchange Market in Kuala Lumpur, in December 2013 alone the Ringgit lost almost 2% against the US Dollar from 3.2230 to 3.2815.  From 02 January 2013 when the exchange rate was RM3.0375, the resultant depreciation of the Ringgit is 8.03% for the whole of 2013.

While the falling Ringgit is good for exporters who will be getting more Ringgit for their exports, the main concern is for the ordinary citizens who will have to pay more for imports into Malaysia.

In reality, exporters do not get the full benefit of the falling Ringgit as shrewd international importers will be asking for prices in lower US Dollar for their exports from Malaysia due to the falling Ringgit.

For the ordinary consumers, the falling Ringgit is going to cause higher prices for consumer goods especially imported ones.  On food items alone, Malaysia imports about RM12 billion annually.   Without any add-on in other costs, the falling Ringgit will cause Malaysians to pay an additional RM1.0 billion for the same food items in 2014.

Coupled with the price hikes caused by the recent policy changes announced by the federal government, Malaysians could be faced with runaway inflation in 2014.

“One shudders to think what inflation will be like in 2015 when the GST is to be implemented?” queried Dr. Jeffrey.

Creating a Laboratory to study on LivingCosts may not be effective if their members are paid high salaries with plush and air-conditioned offices in Putrajaya and Kuala Lumpur.   Their understanding and resultant policy ideas may not be reflective of the person on the street who are going to bear the brunt of the price increases and rising inflation.

The worries of ordinary Sabahans and Sarawakians caused by rising prices will even be more serious given the already higher costs and higher cost of living in the Borneo States caused by many other factors which are not present in the Peninsula including the crippling cabotage policy.

“How will PM Najib tackle the runaway inflation that is coming in 2014, especially for Sabahans and Sarawakians?   Please don’t forget that Sabah and Sarawak will be contributing RM26.6 billion and RM45 billion in oil and gas revenue to Petronas and the federal governmentin 2014.”