Malaysia: Inflation returns in March
April 24, 2019
Consumer prices rose 0.2% month-on-month in March, matching February’s figure and largely driven by higher transport prices.
In year-on-year terms, consumer prices rose 0.2% in March, contrasting February’s 0.4% fall but slightly below market expectations. Core inflation—which excludes certain types of fresh food and administered prices of goods and services—was 0.5%, up from February’s 0.3%.
Looking ahead, price pressures should continue to build amid higher oil prices and as the impact of last year’s tax holiday fades. However, inflation will still be mild.
According to Prakash Sakpal, economist at ING: “The persistence of low inflation has brought central bank (BNM) monetary easing back on the table for the next policy meeting on 7 May when we expect a 25 basis point cut in the overnight policy rate to 3.00%.”
Author: Oliver Reynolds, Economist