Malaysia: Inflationary pressures fade in June on the zero-rating of the Goods and Services Tax
Consumer prices dropped 1.24% month-on-month in June, sharply contrasting May’s 0.17% increase. The print reflected a broad-based reduction in prices as all categories recorded lower prices than the previous month, with notable decreases in prices for food and non-alcoholic beverages; housing, water, electricity, gas and other fuels; and transport.
Inflation fell to 0.8% in June from May’s 1.8%, marking the lowest reading since February 2015. Following the technical withdrawal of the Goods and Services Tax on 1 June, many items became cheaper. Simultaneously, store discounts due to the festival season of Eid al-Fitr provided further downward pressure on prices in June. Annual average inflation came in at 2.6%, down from May’s 2.8%, while core inflation—which excludes fresh food and administered prices of goods and services—dropped to 0.1% in June from 1.5% in May.