Malaysia Must Be Ready to Hike Rates to Curb Prices, OECD Says
According to the latest report from the Organisation for Economic Co-operation and Development (OECD), Malaysia must be prepared to increase interest rates to effectively combat the rising prices of goods and services. The importance of this step is highlighted by global economic changes that have led to heightened inflation and price instability.
OECD economists warn that if the government does not take measures to tighten monetary policy, it could result in long-term economic issues. Bank Negara Malaysia, the central bank, may face pressure to raise rates in response to soaring prices, impacting credit availability for both consumers and businesses.
The report emphasizes that in the event of further price hikes, especially for food and energy, even more aggressive measures would be justified. Considering the current global economic situation, Malaysian authorities should heed these recommendations to stabilize the domestic economy and protect consumer interests.
Despite its strong economic position, the Malaysian economy is influenced by global factors such as rising raw material costs, currency fluctuations, and changes in export demand. Inflation in the country has exceeded the targeted range, aggravating an already challenging scenario for households.
OECD urges proactive actions to prevent further deterioration of the economic situation. Increasing interest rates may help curb inflation, but it may also affect the pace of economic growth. It is crucial for authorities to develop a comprehensive plan that includes measures for both price regulation and economic growth support.
In conclusion, the sooner Malaysia takes necessary steps to combat inflation, the more resilient its economy will be in the long run. Experts recommend that the government and the central bank adopt a joint policy aimed at stabilizing financial conditions and boosting consumer confidence.
