Malaysia: Inflation edges up in December
January 22, 2020
Consumer prices increased 0.9% over the prior month in December, up from the 0.1% rise in November. Higher prices for food and non-alcoholic beverages, and housing and utilities offset lower prices for transport and clothing and footwear.
Inflation notched up to 1.0% in December from 0.9% in November. This brought full-year average inflation to 0.7% in 2019, down from 1.0% in 2018. Going forward, price pressures should increase slightly due to the weakening of the ringgit and the Bank’s recent monetary easing, although they will likely remain largely subdued.
Turning to the inflation outlook for 2020, analysts at Nomura noted:
“We expect underlying inflation pressures to remain weak, reflecting soft demand conditions from the on-going export-led growth slowdown. We expect CPI inflation to pick up to 1.3% in 2020, mainly on a normalisation from base effects due to tax adjustments.”
Author: Lindsey Ice, Economist