In August 2024, the nation’s inflation eased to a four-month low of 1.9% YoY, slightly down from July’s 2.0% and also slightly below forecast and market consensus of 2.0%, mainly due to subdued food prices that offset the rising transport and housing costs, as reported by Kenanga.
Despite rising rental costs, inflation was tempered by moderation across several key components, including restaurants & hotels, transport, clothing and furnishings. Muted food and non-alcoholic beverage prices further weighed down the inflationary pressure.
Amid global disruptions such as storms affecting crop yields and the Red Sea shipping crisis, and domestic factors, Malaysia’s inflation has stayed below 2.0% for 13 consecutive months. This moderation can be partly credited to cheaper imports, aided by a stronger ringgit—one of the world’s top-performing currencies year-to-date. However, government wage hikes, a potentially inflationary 2025 budget, and the rationalisation of RON95 subsidy are expected to push inflation above 3.0% next year.
Globally, inflation remains mixed across major economies, leaving ample room for central banks to pursue policy easing. In the US, Consumer Price Index (CPI), the inflation benchmark, rose 2.5% (July: 2.9%). This marked the lowest level since February 2021, largely due to a decline in energy prices. In the UK, inflation rate recorded 2.2%, unchanged from July as lower fuel prices offset a sharp rise in airfares.
Meanwhile, China’s August inflation figure edged up to a six-month high at 0.6% (July: 0.5%), driven by increased food prices. However, non-food CPI fell to its lowest in over a year, reflecting weak consumer demand.
