Malaysia: Inflation plunges to lowest level since June in December
Inflation came in at 3.8% in December, which was down from November’s 4.0%. December’s result marked the weakest inflation rate since June. The slowdown was primarily due to a slower increase in prices for food and non-alcoholic beverages. Moreover, prices for recreation services and culture grew at a more subdued pace.
However, annual average inflation edged up to 3.4% in December (November: 3.3%).
Lastly, consumer prices increased a seasonally adjusted 0.16% from the previous month in December, coming in below the 0.31% increase logged in November. December’s result marked the weakest reading since September.
Analysts at the EIU commented on the outlook:
“We forecast that consumer price inflation will moderate from an estimated 3.4% in 2022 to 2.6% in 2023, although we expect food prices to remain elevated throughout that year. We also expect services prices to moderate amid greater competition, as more sectors are opened to tourism. Global energy prices will remain relatively high, but this will have only a mild impact on the consumer price index as the government continues to subsidise fuel and electricity tariffs. The removal of these subsidies (which is not part of our central forecast) would result in a much higher headline rate of inflation.”