KUALA LUMPUR: A study has shown that while electricity tarriff adjustments impact input costs for the wholesale & retail trade sector the most, the manufacturing sector sees the most impact in output prices.
According to a box article in the Department of Statistics Malaysia's Malaysia Economic Statistic Review report, the analysis emphasises the significant effects of raised electricity tariffs in Malaysia on intermediate input costs and output price changes across different sectors.
The result shows that manufacturing requires the highest electricity demand, and with a five per cent increase in electricity tariffs increasing output prices in the manufacturing sector the most.
Moreover, the findings highlight the interdependence of sectors within the economy, with both other services and electricity & gas sectors playing a central role in sourcing inputs from and contributing outputs to other industries.
The study aggregated 12 sectors for the purpose of analysis.
The report was authored by Nurul Izzati Sydina, Nur Suaidah Rosli, and Siti Rabiah Abdul Rauf from the Economic Indicators Division of DOSM.
"The manufacturing sector was observed with the highest electricity demand (0.0218), while finance and insurance used the least amount of electricity (0.0010)," the report said.
The wholesale and retail trade sector experienced the most impact from the five per cent increase of the electricity tariff, with a change of input cost by 0.26 per cent for a 5.0 per cent tariff increase.
The report said this was followed closely by the other services sector, with input cost increasing by 0.25 per cent. "The accommodation and food & beverages and electricity and gas sectors are poised to experience an increase in the cost of input by 0.24 per cent for a 5.0 per cent tariff increase," it said.
Overall, the report said the rise in electricity tariffs is expected to affect the costs of producing goods and services across all sectors of the economy.
From another perspective on the impact of tariff changes on industry output, it said the manufacturing sector shows that a 5.0 per cent tariff rise would increase the output price by 0.12 per cent. "The accommodation and food & beverages sector follows closely, with output price rising by 0.11 per cent for a 5.0 per cent tariff rise.
"A 5.0 per cent tariff increase leads to a marginal 0.09 per cent increase in the overall price of output in the economy," it added. Ends