Malaysia: Inflation recedes in May
Consumer prices flatlined in May over the previous month, coming in below April’s 0.16% increase. May’s result marked the lowest reading since November 2020. May’s result largely reflected falling prices for food and non-alcoholic beverages. Meanwhile, prices for housing remained stable compared to the previous month, while costs for transport rose.
Inflation dropped to 4.4% in May, easing from April’s 4.7%. The annual average variation of consumer prices was flat in May (April: -0.6%).
Commenting on the outlook for inflation, analysts at ANZ said:
“Recurrent outbreaks and resultant activity restrictions have prevented any strong sequential build-up in consumer prices, with core inflation oscillating narrowly around 0.7% since October 2020. Our CPI inflation forecast remains unchanged at 2.3% for 2021. Over 2022, however, when the vaccine rollout has likely covered sufficient ground to enable a durable resumption of economic activity, inflation could increase sequentially.”