Malaysia’s Producer Price Index (PPI) for local production rose 10.7% year-on-year in August 2026, accelerating from a 9.7% increase in July, according to the Department of Statistics Malaysia (DOSM).
PPI inflation accelerated to +10.7%yoy in Aug-26 (Jul-26: +9.7%yoy, indicating that cost pressures at the producer level continued to strengthen. The increase was largely driven by the mining sector, where prices surged (+41.2%yoy), reflecting a substantial rise in crude petroleum and natural gas prices. PPI for the manufacturing sector also rose faster by +8.8%yoy (Jul-26: +8.2%yoy), led by petroleum-related products and the electronics sector. PPI for the agriculture industry, on the other hand, eased to +4.6%yoy (Jul-26: +7.2%yoy).
On a monthly basis, PPI increased +1.0%mom (Jul-26: +0.7%mom), reflecting higher mining-related prices, while cost pressures remained broad-based across crude materials, intermediate goods and finished goods. Meanwhile, manufacturing price growth moderated to +0.4%mom (Jul-26: +0.8%mom), despite continued rise in prices for refined petroleum products and electronics.
By stage of production, cost pressures remained broad-based across the production chain, with crude materials (+24.8%yoy; Jul-26: +24.1%yoy), intermediate materials and components (+9.6%yoy; Jul-26: +8.4%yoy) and finished goods (+3.1%yoy; Jul-26: +2.5%yoy) all recording faster price growth in Aug-26
The acceleration in producer inflation was largely driven by energy-related components, suggesting that higher commodity prices remain a key source of cost pressures. MBSB in its note opines that this highlights upside risk to domestic inflation outlook, as companies may pass on some of higher costs through increased selling prices.
