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Malaysia Inflation January 2023

Malaysia: Inflation declines to the lowest level since June 2022 in January

Inflation ticked down to 3.7% in January, following December’s 3.8%. January’s result represented the weakest inflation rate since June 2022. Looking at the details of the release, price growth for food and non-alcoholic beverages eased marginally in January, while transport inflation softened at a more tangible pace.

Nevertheless, annual average inflation edged up to 3.5% in January (December: 3.4%).

Lastly, consumer prices increased a seasonally adjusted 0.23% from the previous month in January, accelerating from December’s 0.16% increase.

Looking ahead, price pressures should continue to moderate. Softer domestic demand and the reopening of the tourism industry pushing down services costs should support a steady disinflationary trend through 2023. Additionally, the adoption of the 2024 public budget, which focuses on the cost-of-living crisis, and upcoming state elections suggest ongoing state fuel subsidies and electricity tariffs in the near term, which should further tame inflation. That said, elevated global food costs will continue to exert upward pressure on consumer prices.

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