Inflation accelerates in March from the prior month

Latest reading: Consumer prices rose 1.7% in annual terms in March, following a 1.4% increase in the prior month. March's reading was the strongest since November 2024. Relative to the prior month's figures, there were higher price pressures for housing and utilities (+1.2% on a year-on-year basis vs +1.1% in February), transportation (+1.6% vs -0.7% in February) and recreation services and culture (+1.0% vs +0.8% in February). In contrast, price pressures reduced for food and non-alcoholic beverages in March (+1.1% vs +1.3% in February). Finally, consumer prices rose 0.29% in March on a month-on-month basis, following a 0.22% rise in the prior month.

Panelist insight: Commenting on the outlook, UOB’s Julia Goh and Loke Siew Ting said: “With the Middle East conflict unresolved and global oil prices elevated, we expect broader first-round Middle East–driven inflation pressures to emerge in the coming months after a spike in Mar inflation. While continued fuel subsidies and a firmer MYR should help cap sharper increases, cost pass-through and second-round effects remain key risks. We expect inflation to surpass 2.0% from May onwards, posing upside risks to our baseline 2026 inflation forecast of 2.0%.”

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