Headline inflation continued to decline to 1.6% during the quarter (3Q 2023: 2%), bank Negara in its Q4 report stated the downward trend was contributed by the moderation in fresh food inflation (4Q 2023: 0.5%; 3Q 2023: 1.9%) and core inflation (2%; 3Q 2023: 2.5%). The lower core inflation was largely driven by an easing n services sub-segments, including food away from home and repair and maintenance of personal transport.
Moving forward, the Central Bank notes Malaysia’s growth to improve due to resilient domestic expenditure and recovery in external demand Growth in 2024 will be driven by resilient domestic expenditure and improvement in external demand. On the external front, the IMF is projecting a rebound in global trade growth from 0.4% in 2023 to 3.3% in 2024.
In 2024, BNM expects inflation is expected to remain modest, broadly reflecting stable cost and demand conditions. However, it said inflation outlook remains highly subject to changes to domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments.
