PETALING JAYA: Unless the cost of food and non-food items are kept under control, consumers should prepare themselves for prices to go up to 10%, said Federation of Malaysian Manufacturers president Soh Thian Lai.
Based on a FMM survey in December on the impact of price increases on items like bread, eggs, diapers and detergents, Soh said unless drastic action was taken to contain the rise in prices, the bulk of the respondents planned to pass the costs to consumers.
“More than two-thirds of the companies we surveyed are expecting to pass the increase in costs of between 1-10% to consumers,” he said.
The rise in prices is due to the Covid-19 pandemic, he said, which has seen supply chain bottlenecks, higher logistics costs, soaring commodity prices, and a global energy and labour shortage.
“Fortunately, two-thirds of the respondents have taken proactive action to cut costs internally and switch to cheaper inputs where available,” he told FMT.
Multinationals in Malaysia had also begun substituting imports by buying local products, he added.
In January, the statistics department said the rise in transport costs and food prices drove inflation to a high of 3.2% in December – surpassing the average inflation rate of 1.9% for the period 2011 to 2021.
The rise was fuelled by a 7.5% rise in transport costs and a 3.2% increase in the cost of food and non-alcoholic beverages, with the inflation rate also attributed to rate increases in housing, water, electricity, gas and other fuels.
“Any increase in prices for manufacturers would have a multiplier impact on the economy,” said Soh.