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Malaysia Inflation February 2021

Malaysia: Inflation rises for the first time in one year in February

Consumer prices rose a seasonally-adjusted 0.33% in February over the previous month, below the 1.24% rise recorded in January. The moderation was largely due to softer price increases for housing and utilities, and transportation.

Inflation came in at 0.1% in February, contrasting January’s 0.2% drop in consumer prices and putting an end to an 11-month streak of falling prices. Meanwhile, the trend pointed down slightly, with the annual average variation of consumer prices coming in at minus 1.4% in February (January: -1.3%).

Commenting on the inflation outlook ahead, Julia Goh and Loke Siew Ting, economists at UOB, noted:

“The full-year inflation reading is expected to average higher at a positive rate of 3.0% this year. This comes as the economy is expected to recover further following the roll-out of vaccines and additional policy support, higher global commodity prices, and year-ago low base effects. […] Despite higher inflation outlook this year, we expect muted underlying demand price pressures amid elevated unemployment rates to keep Bank Negara Malaysia (BNM)’s monetary policy stance in neutral mode.”

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