Malaysia inflation at 2.8 percent in March

MALAYSIA: Malaysia's annual inflation rate in March rose to 2.8 percent from 2.7 percent in February due to higher costs of food, housing and transport, official data showed Wednesday.

For the first three months of the year, the consumer price index rose 2.6 percent from a year earlier, the Statistics Department said.

It said among the food items whose prices had soared were vegetables and powdered milk. Malaysia's government recently said it would spend four billion ringgit (1.3 billion dollars) to increase food production and tackle price hikes as the country faces spiralling global oil and food costs.

Malaysia's annual inflation rate in January was 2.3 percent due to a strong rise in food prices. Bank Negara expects inflation for the year to rise to 2.5-3.0 percent from 2.0 percent in 2007.

Shahrir Abdul Samad, domestic trade and consumer affairs minister said Tuesday record high world oil prices will put a strain on Malaysia's budget with the government forced to allocate more money to fuel and food subsidies.

Malaysia has kept its key interest rate unchanged at 3.50 percent.

Inflation reached 3.6 percent last year due to high global oil prices. Kuala Lumpur, Wednesday, AFP