Lim is confident that the economy will bounce back, saying the indicators have been positive. — Picture by Firdaus Latif

KUALA LUMPUR, Feb 21 — Minister of Finance Lim Guan Eng conceded today that prices of basic goods remain relatively high for consumers even though the rate of inflation only rose 1 per cent in the last quarter.

He said addressing cost of living pressure has been a challenge for the Pakatan Harapan administration, despite rolling out several policies to mitigate inflation.

The coalition, he stressed, needs to find an immediate solution.

“We have managed to keep prices at a range we look for, which is 1 per cent,” Lim said in a keynote address to a property summit here.

“The challenge is how to translate that so people can enjoy and feel it.”

While noting the 1 per cent inflation rate was the lowest in nine years, Lim acknowledged that the CPI may need to be supplemented with other data to more accurately convey the health of the economy.

In 2017, when the Goods and Services Tax (GST) still existed, inflation was 3.7 per cent.

It is the first time the new government has admitted that it has not been able to address living cost problems, a key issue that PH said it would tackle before winning the general election.

The disconnect between the official inflation rate and the reality of everyday lives underpins the growing public frustration towards the new government.

But Lim said PH is trying its best. The introduction of the index wage, for example, showed the coalition's commitment to increase wages.

“With the wage index we hope salaries can reflect the reality,” he said.

“Employers shouldn't just base pay on the CPI.”

And the minister expressed confidence that the economy will bounce back.

He said there have been positive indicators that businesses are responding well to the reform measures.

“I think investors will find us attractive.”