INFLATION in Malaysia, which has risen to an eight-year high on fuel costs, may spiral into second-round price effects, but may also help control high levels of debt.
Typically in the past, there could be second-round effects if the economy is above potential and there are demand pressures, Bank Negara director of economics, Fraziali Ismail, was quoted as saying in a Bloomberg interview.
Yes, the economy is on the up, but we dont see those pressures emanating at the moment.
Inflation will turn ugly if cost-induced price pressures transmit into a second-round price effect caused by demand for higher wages or excessive consumer demand.
Demand pressure is not apparent now as core inflation, which excludes volatile oil prices, is somewh…
Read the full article at: http://www.thestar.com.my/business/business-news/2017/04/05/rising-inflation-has-risks-but-may-help-curb-debt/
