MALAYSIA’s headline and core inflation rates for 2024 both eased to 1.8%, a decrease from 2.5% and 3.0%, respectively, in 2023, according to the latest data from Bank Negara Malaysia (BNM).
In the fourth quarter (4Q) of 2024, headline inflation slightly declined to 1.8%, down from 1.9% in the previous quarter (3Q 2024).
This reduction was primarily attributed to lower inflation in mobile communication services and RON97 petrol, though it was partly offset by rising costs in food-related items, notably fresh vegetables, fish, and seafood.
Core inflation, which excludes volatile items such as food and energy, also saw a decrease to 1.7% in 4Q 2024, compared to 1.9% in 3Q 2024. The drop was mainly driven by a significant 10% decline in inflation for mobile communication services, a sharp reversal from the stable price movement seen in the previous quarter.
BNM noted that inflationary pressures remained moderate, with the share of Consumer Price Index (CPI) items showing monthly price increases staying well below the long-term average. In 4Q 2024, 38.9% of CPI items registered price hikes, compared to the historical average of 39.8% between 2011 and 2019.
Looking ahead, inflation in Malaysia is expected to remain manageable in 2025, supported by easing global cost conditions and the lack of significant domestic demand pressures.
While recent domestic policy reforms could contribute to some upward pressure on prices, BNM emphasised that the overall impact on inflation is anticipated to be contained.
However, the central bank acknowledged potential upside risks, particularly if broader price policies related to the CPI have a more substantial cascading effect on prices. – February 14, 2025
