Malaysia Consumer Inflation Eased in 2023, Stabilized in Final Month of Year


Published: Jan. 21, 2024 at 11:12 p.m. ET

By Ying Xian Wong

KUALA LUMPUR–Malaysia’s inflation held steady in the final month of 2023, expanding at the same pace as in November, when it grew at its slowest since early 2021.

The consumer price index rose 1.5% in December from a year earlier as prices of food–a key component–declined slightly, the Department of Statistics said Monday….

By Ying Xian Wong

 

KUALA LUMPUR–Malaysia’s inflation held steady in the final month of 2023, expanding at the same pace as in November, when it grew at its slowest since early 2021.

The consumer price index rose 1.5% in December from a year earlier as prices of food–a key component–declined slightly, the Department of Statistics said Monday. The result was in line with the median forecast in a survey of six economists compiled by The Wall Street Journal and brought inflation to 2.5% for 2023. The annual reading is down from the 3.3% expansion seen in 2022 and on par with 2021’s inflation print.

Economists had largely expected inflation to stay steady in December. Kenanga Investment Bank economist Muhammad Saifuddin Bin Sapuan expected food prices, especially for fish and vegetables, to continue being a main driver of inflation.

The data comes amid expectations that the country’s central bank will hold rates steady when it meets on Thursday. At its last meeting of 2023, at which it opted to stand pat, Bank Negara Malaysia said its monetary policy stance is consistent with its assessment of inflation but that it would stay vigilant to developments that could shift the outlook for both inflation and growth.

Monday’s release follows trade and economic growth figures for 2023 last week that were broadly disappointing, undershooting market expectations.

December’s CPI data showed that prices of food and non-alcoholic beverages which has a 29.5% weighting, rose 2.3% on year, easing from 2.6% on November.

Core inflation, which strips out volatile prices of fresh food as well as prices of government-administered goods, increased 1.9% in December from a year earlier.

On a monthly basis, consumer prices in December edged up 0.2%, compared with 0.0% in November.

Economists at HSBC Global Research expect inflationary pressures to “remain in check over the coming months,” but said in a note that headline may soon bottom out. While the growing impact of the El Nino weather pattern and geopolitical tensions could pose some threats to food and fuel inflation, government subsidies could offset some of the pressure, HSBC said, adding that it expects “the high base effect to start fading out” by the second half of the year.

 

Below are the inflation figures for Malaysia by sector in December:

CPI % Change MoM % Change YoY +0.2% +1.5% Sector Index Weighting % Change YoY Food & Non Alcoholic Drinks 29.50% 2.3 Housing, Utilities & Fuels 23.80% 1.6 Transport 14.60% 0.3 Misc Goods & Services 6.70% 2.7 Recreation Services & Culture 4.80% 1.9 Communication 4.80% -3.7

Write to Ying Xian Wong at yingxian.wong@wsj.com



This article was originally published by a www.marketwatch.com . Read the Original article here. .