Inflation Rate in Malaysia

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  • Topic: 1925, Inflation, 1918
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  • Published : November 15, 2010
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The graph of Inflation rate (consumer prices)

*30% of goods in Malaysia are price-controlled
Year| Malaysia| Japan|
| Inflation rate(consumers price)| Rank(222)| Inflation rate(consumers price)| Rank(222)| 2003| 1.90%| 168| -0.90%| 215|
2004| 1.10%| 189| -0.30%| 210|
2005| 1.30%| 31| -0.10%| 6|
2006| 3.00%| 90| -0.30%| 7|
2007| 3.80%| 111| 0.30%| 9|
2008| 2.00%| 40| 0.10%| 5|
2009| 5.40%| 89| 1.40%| 10|
Source: CIA World Factbook and Index Mundi
Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services (Tucker, I.B 2008). The inflation rate of Malaysia from year 2003 to year 2004 has decreased from 1.9% to 1.1% while the inflation rate of Japan from year 2003 to year 2004 has increased from -0.9% to-0.3%. It was then followed by a continuous increment of inflation rate in Malaysia from 1.3% to 3% and finally to 3.8% from year 2005 to year 2007. On the other hand, Japan faced a decrement of inflation rate from year 2005 to year 2006 which is from -0.1% to -0.3%. The inflation rate of Japan increased from year 2006 to year 2007 which is from -0.3% to 0.3%. Subsequently, from year 2008 to year 2009, the inflation rate of Malaysia increases from 2% to 5.4% while Japan has a rise from 0.1% to 1.4%. It is shown that both Malaysia and Japan reached their highest inflation rate during the year 2009. In contrast, the lowest inflation rate for Malaysia between year 2003 to year 2009 is during year 2004 while for Japan is during year 2003. Besides that, the information also shows that Malaysia has inflation between year 2003 to year 2006 while Japan faces deflation. For year 2007 until year 2009, both countries have inflation. One of the reasons for inflation occurrence in Malaysia is the increment in price of world crude oil. The gas price will increase as the government...
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