Identifying key drivers of food price inflation in Malaysia

In Malaysia, food price inflation reached its highest level at 8.8% in mid-2008 compared to overall inflation of 5.5% for the same period, mainly blamed on the spike in world commodity prices. However, recent moves by the government to rationalize food and energy subsidies have also led to higher th...

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Main Authors:	Norazman, Umi Zakiah, Khalid, Haniza, Mat Ghani, Gairuzazmi
Format:	Conference or Workshop Item
Language:	English
Published:	2016
Subjects:	HB221 Price HB801 Consumption. Demand
Online Access:	http://irep.iium.edu.my/51485/ http://irep.iium.edu.my/51485/1/51485_Identifying_key_drivers_of_food_price_inflation_in_Malaysia.pdf

id	iium-51485
recordtype	eprints
spelling	iium-514852016-08-17T07:40:08Z http://irep.iium.edu.my/51485/ Identifying key drivers of food price inflation in Malaysia Norazman, Umi Zakiah Khalid, Haniza Mat Ghani, Gairuzazmi HB221 Price HB801 Consumption. Demand In Malaysia, food price inflation reached its highest level at 8.8% in mid-2008 compared to overall inflation of 5.5% for the same period, mainly blamed on the spike in world commodity prices. However, recent moves by the government to rationalize food and energy subsidies have also led to higher than normal headline inflation figures and cause public concern. This study examines the pattern of retail food price changes and also explores the link between world raw food prices and subsidies on domestic retail prices. A vector error correction model (VECM) of monthly data (1991-2013) confirms that real effective exchange rate and world oil price primarily determine the food price in Malaysia. World food commodity prices matter as well but this effect is primarily indirect via the impact with labor cost on world agriculture prices, the latter’s change being subsequently passed through on the domestic retail prices. Given the expectation of unstable macro conditions in global market, world commodity price is likely to be uncertain in the future, understanding the dynamics of these shocks on domestic retail price is important for future macroeconomics policy design. 2016-07-28 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/51485/1/51485_Identifying_key_drivers_of_food_price_inflation_in_Malaysia.pdf Norazman, Umi Zakiah and Khalid, Haniza and Mat Ghani, Gairuzazmi (2016) Identifying key drivers of food price inflation in Malaysia. In: Persidangan Kebangsaan Ekonomi Malaysia ke 11, Putrajaya.
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HB221 Price HB801 Consumption. Demand
spellingShingle	HB221 Price HB801 Consumption. Demand Norazman, Umi Zakiah Khalid, Haniza Mat Ghani, Gairuzazmi Identifying key drivers of food price inflation in Malaysia
description	In Malaysia, food price inflation reached its highest level at 8.8% in mid-2008 compared to overall inflation of 5.5% for the same period, mainly blamed on the spike in world commodity prices. However, recent moves by the government to rationalize food and energy subsidies have also led to higher than normal headline inflation figures and cause public concern. This study examines the pattern of retail food price changes and also explores the link between world raw food prices and subsidies on domestic retail prices. A vector error correction model (VECM) of monthly data (1991-2013) confirms that real effective exchange rate and world oil price primarily determine the food price in Malaysia. World food commodity prices matter as well but this effect is primarily indirect via the impact with labor cost on world agriculture prices, the latter’s change being subsequently passed through on the domestic retail prices. Given the expectation of unstable macro conditions in global market, world commodity price is likely to be uncertain in the future, understanding the dynamics of these shocks on domestic retail price is important for future macroeconomics policy design.
format	Conference or Workshop Item
author	Norazman, Umi Zakiah Khalid, Haniza Mat Ghani, Gairuzazmi
author_facet	Norazman, Umi Zakiah Khalid, Haniza Mat Ghani, Gairuzazmi
author_sort	Norazman, Umi Zakiah
title	Identifying key drivers of food price inflation in Malaysia
title_short	Identifying key drivers of food price inflation in Malaysia
title_full	Identifying key drivers of food price inflation in Malaysia
title_fullStr	Identifying key drivers of food price inflation in Malaysia
title_full_unstemmed	Identifying key drivers of food price inflation in Malaysia
title_sort	identifying key drivers of food price inflation in malaysia
publishDate	2016
url	http://irep.iium.edu.my/51485/ http://irep.iium.edu.my/51485/1/51485_Identifying_key_drivers_of_food_price_inflation_in_Malaysia.pdf
first_indexed	2023-09-18T21:12:53Z
last_indexed	2023-09-18T21:12:53Z
_version_	1777411369964929024

Identifying key drivers of food price inflation in Malaysia

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