Malaysia inflation an declining trend

BMI, a Fitch Solutions company, predicts Malaysia’s headline inflation will continue to ease due to high base effects from last year’s surge in global food and energy prices. Malaysian Government subsidies and price-control measures will also cap further price increases.

The research arm expects no further rate hikes by Bank Negara Malaysia in 2023, given the 3.1% core inflation.

The recent decline in inflation aligns with a historical average of 2.0%, reducing the pressure for immediate monetary policy actions. BMI also revised its forecast, expecting inflation to fall back to 2.0% by year-end and an average of 2.7% for 2023.