Inflation in Malaysia, September 2022

Inflation in September was 4.5% compared to 4.7% in August. The cooling of price pressures was primarily due to slower growth in prices for food and non-alcoholic beverages. In addition, the price pressure on housing and communal services grew at a milder pace.

The trend increased slightly, with average annual inflation of 3.2% in September (August: 3.0%).

Finally, consumer prices rose a seasonally adjusted 0.08% in September from the previous month, down from a 0.23% increase in August. The September result was the mildest price increase since August 2021.

Commenting on the outlook, EIU analysts said:

“We believe consumer price inflation likely peaked in August. However, we maintain our view that consumer prices will continue to exceed BNM’s guidance range in the final months of 2022, although headline inflation will fall below 4% from October on the back of a moderate decline in food price inflation.”

We estimate inflation to average 3.0% in 2023, up 0.2 percentage points from last month’s forecast. In 2024, the group forecasts inflation at an average of 2.3%.