PETALING JAYA: Asset price inflation, which is posing a threat in some Western economies, is unlikely to rear its ugly head in Malaysia amid the country’s low interest rates and massive stimulus packages. He said the relationship between inflation or changes in a country’s general price level and asset price inflation is two-way. In Malaysia’s current situation, the cost-push consumer price inflation would exert varying upward pressures on asset prices, depending on individual asset characteristics, investor behaviour and supply-demand dynamics. “Excessive asset price inflation, however, will also lead to asset price crashes if the markets think they are grossly overvalued. OCBC Bank economist Wellian WirantoOn asset price inflation, OCBC Bank economist Wellian Wiranto said any sustained asset-price inflation could potentially worsen the degree of inequality in the economy.

Source: The Star June 21, 2021 01:12 UTC