[KUALA LUMPUR] Malaysia’s consumer price index rose 1.5 per cent year on year in February, in the slowest rise since January 2024, data from Department of Statistics Malaysia (DOSM) report showed on Friday (Mar 21).
The inflation rate eased from 1.7 per cent in January, and matched the median estimate of 1.5 per cent made by a group of economists in a recent Reuters poll.
Core inflation, which excludes volatile items such as food and fuel, increased to 1.9 per cent from 1.8 per cent in January.
Of the 573 items tracked in the consumer price index, the prices of 358 (62.5 per cent of the basket of goods) went up while 168 (25.5 per cent) recorded declines, said DOSM.
Mohd Uzir Mahidin, the agency’s chief statistician, attributed the moderation in headline inflation to the stable prices of administered items such as cooking gas, fuel and public transport fares.
Economists expect Malaysia’s inflation to remain at a manageable level, supported by easing commodity and energy prices.
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RHB Research economist Chin Yee Sian noted that slowing external demand, particularly from the US due to the tariffs, would help contain commodity prices and keep inflationary pressures subdued across Asean.
“However, unforeseen events, such as escalated geopolitical tensions or unexpected oil supply cuts from oil-producers, could drive energy prices higher,” she said in a report on Friday.
RHB Research maintains its 2025 inflation projection for Malaysia at 2.4 per cent, and expects Bank Negara’s benchmark interest rate to remain at 3 per cent, citing steady economic prospects and manageable inflation pressures.
On the core inflation growth which outpaced headline inflation, CIMB Treasury and Market Research pointed out that this could be partly driven by the recent salary revision for civil servants and the minimum-wage hike.
“We expect the impact to be one-off, similar to the previous minimum-wage revision in May 2022, when core inflation rose by 0.4 per cent, before stabilising at an average of 0.3 per cent in the second half of 2022,” said CIMB senior economist Lim Yee Ping and head of research, Michelle Chia.
They noted that wage growth in the manufacturing and services sectors, along with hiring activity, continue to show a modest trend, suggesting that core inflation is likely to remain subdued in coming months.
In the Asia-Pacific, Malaysia recorded a higher inflation rate in February than Indonesia, which had its first deflation in over two decades, and Thailand (1.08 per cent). But Malaysia’s rate was lower than that of the Philippines (2.1 per cent) and South Korea (2 per cent).
The eurozone experienced inflation of 2.4 per cent; US inflation stood at 2.8 per cent in February.
