Producer Price Inflation Accelerates to 9.7 Percent in July on Energy and Manufacturing PressuresProducer prices in Malaysia expanded at a faster pace in July 2026, driven higher by persistent cost pressures across domestic extraction and industrial production. Official figures released by the Department of Statistics Malaysia show the nation’s Producer Price Index for local production rose 9.7 percent year-on-year, picking up momentum from the 9.2 percent expansion recorded in June.
The overall acceleration reflected substantial cost increases within primary resource sectors, alongside continued price momentum across heavy and high-tech manufacturing industries.
Upstream price increases were led by the mining sector, which jumped 30.5 percent year-on-year compared to a 29.0 percent increase in June. The sector’s sharp upward trend was anchored primarily by the extraction of crude petroleum, which surged 39.6 percent.
Industrial output prices also gathered pace, with the manufacturing sector rising 8.2 percent year-on-year after a 7.2 percent gain in the previous month. Growth within factory gates was heavily driven by refined petroleum products, which climbed 30.4 percent, alongside a 10.5 percent increase in computer, electronic, and optical products.
In contrast, price growth in agriculture, forestry, and fishing cooled slightly to 7.2 percent year-on-year from 9.1 percent in June. Higher animal production costs, up 11.3 percent, and a 6.2 percent rise in perennial crop cultivation maintained overall positive growth in the primary sector. Utilities also saw notable increases, as water supply costs advanced 10.2 percent and electricity and gas supply rose 6.7 percent year-on-year.
On a month-on-month comparison, domestic producer prices edged up 0.7 percent in July, slightly ahead of the 0.6 percent growth logged in June.
The sequential performance marked a clear recovery in the mining index, which turned around to grow 1.1 percent after contracting 11.6 percent in June. The rebound was sparked by a 13.5 percent month-on-month surge in natural gas extraction.
Manufacturing costs advanced 0.8 percent over the month, sustained by sequential gains in refined petroleum at 1.7 percent and electronics manufacturing at 1.5 percent. The agricultural sector expanded 0.7 percent month-on-month, reversing a 0.8 percent dip in June due to a 2.4 percent increase in animal production. Utility prices showed mixed short-term movements, with electricity and gas nudging up 0.1 percent while water supply fell 1.4 percent.
Looking at the economy through processing stages, input costs expanded across the board on both an annual and monthly basis.
Crude materials intended for further processing rose 24.1 percent year-on-year, driven mainly by a 27.9 percent climb in non-food raw materials. Intermediate materials, supplies, and components increased 8.4 percent, supported by a 13.8 percent increase in processed fuel and lubricants. Finished goods registered a 2.5 percent annual gain, boosted by a 3.4 percent increase in capital equipment.
From the previous month, intermediate materials recorded the strongest gain across processing tiers at 1.1 percent, while finished goods and crude materials rose 0.6 percent and 0.1 percent, respectively.
