Minimum wage no risk to inflation in Malaysia

The minimum wage introduced by the Malaysian government this year isn't a risk to inflation and will contribute to the Southeast Asian nation's growth, Bank Negara Malaysia Gov. Zeti Akhtar Aziz has said. "We believe it represents a small part of production costs and therefore wouldn't contribute to higher prices particularly when we are in a period of moderating prices," Zeti told reporters at an industry conference, adding that the central bank's inflation forecast of 2%-3% "still remains." "It is a positive thing because it will contribute to increased consumption and these (people benefiting from the minimum wage) are groups that have a high propensity to consume and therefore it will contribute to growth," she said. Malaysia last month introduced its first minimum wage law for the private sector as Prime Minister Najib Razak seeks to bolster electoral support ahead of a national election expected within months. The central bank is due to meet Friday for its third policy meeting this year, where it is widely expected to keep its overnight policy rate unchanged at 3.0% for the sixth consecutive time amid easing inflationary pressures and a still-resilient economy.