Bank Negara: Prices Of Goods And Services Are Expected To Fall After GST Reduction

The BNM governor wants the public and businesses to benefit from the amendment.

Cover image via The Malaysian Reserve

Bank Negara Malaysia (BNM) is expecting prices of goods and services to decrease following the government's decision to make the Goods and Services Tax (GST) zero-rated starting 1 June 2018

A Bernama report quoted governor Muhammad Ibrahim as saying that it was crucial for the authorities to ensure that businesses and the public will benefit from this amendment

β€œMost likely than not it will have an impact on the inflation but it is too early for us to calculate (the inflation rate) right now.

"The inflation rate for the first quarter is set at between two and three percent, but with the information coming in, we will look at it again," he said as reported by Bernama

Muhammad also added that the ringgit remained stable over the past week despite the change in the government. However, moving forward, lots of "noise" is expected.

"There will be a lot of noises in the short term that would affect the ringgit but in the medium and long-term, the ringgit would adjust to reflect the economic fundamentals," he added.

The Finance Ministry announced today, 17 May, that the controversial GST will be replaced by the Sales and Services Tax (SST):

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