PUTRAJAYA, MALAYSIA: Inflation in the country has peaked and prices of goods have started to come down.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Abdul Samad said the Consumer Price Index (CPI) for October had shown a reduction of 0.4 percentage points compared to the previous month.

'In October, it was recorded at 7.6%.

'This reflects the current downward trend of fuel, food and commodity prices such as palm oil, which make up 80% of household spending.

'We expect this reduction in the inflation rate to continue. Although we don't know whether we will be able to achieve the 3.8% Consumer Price Index we saw in May this year, we can definitely get inflation under control below 7%', he told reporters at his office here yesterday.

Shahrir expressed confidence that there would be further price reduction in food items as the effects of the decline in the market price of many commodities have yet to kick in.

'The prices are coming down not because of poor demand from consumers like what is currently happening in the United States but because of the reduction in commodity prices', he said, adding that further cut in prices of milk is also expected this month.

Malaysia recorded the highest CPI at 8.5% in August.

Shahrir said the Cabinet meeting yesterday also decided to have the National Economic Action Council discuss the possibility of continuing with the current managed-float mechanism in determining petrol pump prices or to set a floor price.

Any discussion of a floor price will take into account the possibility of losses suffered by petrol station owners.

The council will meet on Dec 1 and we will decide then. Malaysians are paying RM2 for each litre when the real petrol pump price should be RM1.60 per litre without government subsidy.

'This is the first time Malaysians are paying more than the market price for petrol', he said, adding that this was because the global price was declining at a drastic rate.

Shahrir said Malaysians could expect another reduction in petrol pump price by Dec 1.