Malaysia Inflation December 2020


Malaysia: Consumer prices drop again in annual terms in December

January 22, 2021

Consumer prices rose 0.50% on a seasonally-adjusted basis over the previous month in December, contrasting November’s 0.17% decline. December’s upturn was largely attributed to rebounding prices for transport, and food and non-alcoholic beverages.

Meanwhile, consumer prices declined 1.4% year-on-year in December, following November’s 1.7% drop. Lastly, the annual average variation of consumer prices came in at minus 1.1% in December, below November minus 0.9%.

Commenting on the inflation outlook, Julia Goh and Loke Siew Ting, economists at UOB said:

“For the full year, headline inflation averaged at -1.2% in 2020, which was also in line with our projection of -1.1% and official forecast of -1.0%. We expect inflation to return to positive territory by 1Q21 and to average higher at 2.1% for the entire year of 2021 (official forecast: +2.5%). This is mainly based on the assumption of economic recovery post containment measures and inoculation, firmer global oil prices, and favourable statistical comparison base effects.”

FocusEconomics Consensus Forecast panelists expect inflation to average 1.8% in 2021, which is unchanged from last month’s forecast, and 2.1% in 2022.


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Malaysia Inflation Chart

Malaysia Inflation December 20 20

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Department of Statistics Malaysia (DSM).

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