How to Combat Inflation

Recommendations Based on the results generated from the multiple regression analysis of this research, there argon few recommendations that force out be implemented to combat the inflation in Malaysian economy. The recommendations are 1. Malaysia government should focus on producing export goods than importing goods from other countries in do to encourage wait of Ringgit Malaysia currency value. In turn, it will slump the inflation rate and trigger the purchasing power to other currencies namely, dollar, euro and pound. This is because countries with exalted inflation rate will experience depreciation in their currency.However, rase though the ringgit appreciation female genital organ reduce the import prices, consumers may non able to get the benefit from the reduction. According to Central Bank, the vigorous appreciation of ringgit currency can slow down the export competitiveness that can at a time impact income and weaken domestic demand. 2. GDP and CPI is directly impac t each other. Income is adjusted according to the CPI level. In order to reduce the inflation rate, government should monitor the growth of GDP. If GDP is emergence too agile, CPI also will increase too fast and subsequently, increase the cost of living.In addition, the government is slower than the market, making it almost unsufferable for government to keep up with the income adjustments needed to provide good prime(a) of life to Malaysians. 3. It is Central Bank responsibility to decide the most distinguish deposit rate to be imposed on the money savers. mavin of the ways to reduce the inflation rate in Malaysia is by change magnitude the deposit rate so that people will save more(prenominal) and spends less. Increase in deposit rate can discourage borrowing, and somehow reduce the consumer spending and consequently reduce the inflation rate.