BANGI - The Malaysian government is looking to set up a new index that will measure the cost of living more accurately, as it faces widespread complaints about high inflation in the country.
Like other countries, Malaysia uses the Consumer Price Index (CPI) as its main inflation gauge. It is generally used by employers to determine annual salary rises.
But Finance Minister Lim Guan Eng said on Monday (March 4) that CPI may not accurately measure inflation faced by Malaysian households.
This is because the CPI also took into account other factors in its calculations, such as an estimate on business production cost and input cost, Bernama news agency quoted him as saying.
"What is intended will not be achieved if we still use CPI as a reference point to determine the amount of salary hike," he in a speech at a seminar in Bangi, Selangor, as quoted by Bernama.
"I have brought this matter to (central bank) Bank Negara Malaysia," he said. "Maybe the (retirement fund) EPF can do the same because at least there are two models for us to compare the indexes to accurately measure the cost of living," he added.
The nine-month old Pakatan Harapan government is facing public anger, as it has failed to rein in household costs despite removing the unpopular 6 per cent goods and services tax (GST), a broad-based tax, and replacing it with a narrower sales and services tax.
Employees Provident Fund (EPF) chief executive officer Tunku Alizakri Aliaswho was at the same function said the creation of a new living-cost index would be a good first step to move forward in terms of social security infrastructure.