Malaysia: Inflation drops to lowest level since April in August
Latest reading: Inflation ticked down to 1.9% in August, following July’s 2.0%. August’s figure represented the weakest inflation rate since April. The reading was largely driven by slower growth in prices for food and non-alcoholic beverages, housing and utilities, plus recreation services and culture.
The trend was unchanged, with annual average inflation remaining at July’s 1.8% in August.
Lastly, consumer prices rose a seasonally adjusted 0.08% from the previous month in August, matching July’s reading. August’s result marked the weakest reading since November 2023.
Panelist insight: United Overseas Bank analysts Julia Goh and Loke Siew Ting commented on the outlook for inflation and monetary policy:
“Given that our full-year inflation forecast stays at the lower bound of BNM’s target range which has factored in some impact of the government’s subsidy cuts including fuel, the rising inflation pervasiveness does not appear to be a point of concern for the central bank at this juncture. We believe BNM will continue to guard against the second-round effects of robust domestic demand and favorable labor market conditions on inflation over the coming quarters. This will support an extended interest rate pause at 3.00% for the rest of the year.”