Malaysia’s headline inflation rose to 1.9% in the second quarter of 2026 (2Q26), from 1.6% in the previous quarter, but overall price pressures remain contained, Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour said.
The Governor shared that the increase was driven largely by higher external cost pressures stemming from the conflict in West Asia, particularly through rising fuel prices.
Fuel inflation climbed to 5% in 2Q26, reversing from -1.5% in the first quarter, following increases in RON97 petrol and diesel prices.
Despite the uptick, Abdul Rasheed said Malaysia’s headline inflation is expected to average between 1.5% and 2.5% in 2026, supported by stable domestic demand and policy measures that should limit the transmission of higher global costs to consumers.
Producer cost pressures have increased but remain concentrated at the upstream level, with limited pass-through to later stages of production and broader consumer prices.
Meanwhile, Abdul Rasheed shared that core inflation eased to 1.9% from 2.1%, reflecting softer price increases in jewellery and watches as well as rent.
Inflation pervasiveness, measured by the share of Consumer Price Index items recording monthly price increases, rose to 45.5% from 38.3% in the previous quarter.
The figure was close to its historical average of 45.6%, with the increase mainly driven by a sharp rise in April before moderating in May and June.
BNM expects inflationary pressures linked to the West Asia conflict to remain manageable, with targeted fuel subsidies and stable demand conditions helping cushion the impact of higher external costs.
