Technological advancements and food price stability: insights from Malaysia’s industry4WRD policy

This study investigates the factors affecting food prices in Malaysia, focusing on the roles of crude oil prices, exchange rates, and industrial production, both aggregated and disaggregated. Using the ARDL model, the results reveal that crude oil prices have a significant positive impact on food prices, while exchange rate appreciation exerts downward pressure on food prices, particularly in the post-Industry4WRD period. A disaggregated analysis of industrial production shows that electricity output positively influences food prices, while manufacturing output has a negative effect, highlighting the role of technological advancements and productivity gains in reducing food price inflation. Based on pre- and post-Industry4WRD sub-periods, the robustness test demonstrates the stronger long-run relationships in the post-policy period, reflecting the increased importance of industrial productivity driven by technological progress. The study’s findings emphasize the need for energy efficiency, currency stability, and sustained investment in technology to ensure food price stability in Malaysia. Policymakers should focus on promoting sustainable industrial practices and leveraging technological advancements, as outlined in the Industry4WRD policy, to mitigate the impact of macroeconomic fluctuations on food prices and foster long-term economic resilience.