According to the Statistics Department, the CPI expanded from 99.7 to 103.2, and when compared with May, it grew by 0.3 per cent.
HSBC Bank economists Wellian Wiranto and Namrata Mittal said June's CPI did not come as a surprise.
"Still, it does show that inflation continues to make its presence felt."
Housing, utilities and fuel saw some expected increase, at 1.9 per cent year-on-year compared with 1.8 per cent in May, contributed by the 7 per cent increase in electricity tariff, effective at the end of May.
"The direct effect is not all that strong, given that electricity only commands 2.9 per cent of the total CPI basket, however."
On whether Bank Negara Malaysia would hike the Overnight Policy Rate (OPR) in September, they said yesterday's number has not helped much.
"In general, we do still see inflation rate heading up in the coming months here, given the continued pass-through from the recent changes in the administered prices such as RON 97 fuel, sugar and electricity.
"There is also the seasonal effect of the Muslim fasting month, even if it is typically less pronounced in Malaysia than, say, Indonesia."
HSBC expects the central bank to raise the OPR by 25 basis points to 3.25 per cent in September. - By Rupa Damodaran
Read more: Malaysia CPI up 3.5pc in June on higher food prices http://www.btimes.com.my/Current_News/BTIMES/articles/rup203/Article/#ixzz1SlQuQ5CB
Published: 2011/07/21
