Malaysia Sees Dip in Inflation Rate Amid Subdued Food & Transport Costs
KUALA LUMPUR – Malaysia registered its most moderate inflation rate for the year in July 2023, hitting 2%. Factors include restrained rises in food and non-alcoholic beverages, coupled with a tempered hike in hotel and restaurant prices.
- Malaysia’s July inflation: Dipped to 2% YoY, below June’s 2.4% and economist forecasts of 2.1%.
- Monthly headline inflation: Declined to 0.1% in July from June’s 0.2%.
- Core inflation: Saw a reduction, moving to 2.8% in July from 3.1% in June.
- Food and non-alcoholic beverages: These costs, accounting for 29.5% of the consumer price index, witnessed a 4.4% rise.
- Major contributors: Increases in meat (5.5%), cereals including rice and bread (4.5%), dairy products like milk and cheese (4.3%), and sweet items including sugar and chocolates (3.5%).
- Eating out: Costs of dining outside the home slowed to 6.2% compared to 6.8% in the preceding month.
- Restaurants & hotels: A slower price increase was observed in restaurants and cafés (4.9%), though accommodation services saw a spike, recording 5.7%, up from 4.7% in June.
- Transportation costs: Witnessed a contraction of 0.4% in July, marking the sector’s first drop since March 2023. This decline is primarily attributed to a 0.8% decrease in personal transport operation, highlighted by a significant 28.8% decline in the price of unleaded petrol RON97 year-on-year.
The more modest rise in prices, especially in food, comes as a breather for the general public who have been grappling with global economic uncertainties. The slowing increase in restaurant and hotel rates indicates a possible hesitancy among consumers to spend on leisure, a sentiment echoed in various parts of the Asia Pacific region.
Furthermore, the decline in transport costs, notably petrol prices, could have wider implications for the economy, affecting the logistics and transportation industries while providing potential relief to individual consumers.