Key Points:
- Malaysia’s inflation rate drops to 2% YoY in July 2023.
- The rate is marginally below the anticipated 2.1% forecast by Reuters’ poll of economists.
- Food and non-alcoholic beverages sector sees a 4.4% rise, with meat and cereals as significant contributors.
- Restaurants and hotels inflation decelerates, with accommodation services observing a slight surge.
- Transport costs register negative growth, majorly influenced by a drop in unleaded petrol prices.
Asia-Pacific, Today: In a significant economic update from Malaysia, the nation’s year-on-year inflation rate for July 2023 has been reported at 2%, marking the most muted inflation rate the country has seen this year. This recent figure is marginally lower than the median 2.1% inflation rate that a poll of economists, conducted by Reuters, had previously projected. It also stands noticeably lower than the 2.4% inflation recorded in June 2023.
Transitioning to monthly figures, July’s headline inflation was at 0.1%, a deceleration from the 0.2% recorded in June. Interestingly, while the headline inflation dwindled, the core inflation showcased an ascent of 2.8%, albeit slower than the 3.1% observed in the prior month.
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Offering an in-depth perspective, the National Statistics Department elucidated on the components that led to such figures. Food and non-alcoholic beverages, which account for nearly 29.5% of the nation’s total consumer price index (CPI), saw an uptick of 4.4%. Various subgroups within this category experienced varied growth rates. Meat products led the pack with a 5.5% rise, closely followed by rice, bread, and other cereals at 4.5%. Dairy products and sweeteners also observed modest growth rates of 4.3% and 3.5%, respectively.
Moreover, a noteworthy slowdown was evident in the ‘food away from home’ category, with inflation decreasing to 6.2% in July, in contrast to the 6.8% recorded in June.
Moving away from edibles, the hospitality sector showcased intriguing trends. While inflation related to restaurants and cafés moderated to 4.9%, the accommodation services segment witnessed a higher growth rate of 5.7%, up from 4.7% in June.
However, the most arresting development comes from the transport sector. July marked a contraction of 0.4%, signaling the first negative growth for this segment since March 2023. Diving deeper, this contraction can primarily be attributed to the 0.8% drop observed in the ‘operation of personal transport equipment’ subgroup. A striking 28.8% negative growth was reported in the prices of unleaded petrol RON97, which stood at RM3.37 per litre in July 2023, contrasting with RM4.73 per litre in July 2022.
