Malaysia's Inflation Cools in November

Malaysia's inflation rate continued to cool in November, with prices of core products such as food and beverages growing at a slower pace than expected.

Decrease in Consumer-Price Index

According to the Department of Statistics, the consumer-price index rose by 1.5% in November compared to the previous year. This is lower than the 1.8% increase recorded in October, which was already the lowest since April 2021. Consensus forecasts had projected a 1.7% rise.

Expected Softening of Inflation

Economists had anticipated a softening of inflation, as seen throughout the year. Moody's Analytics had predicted a cooling of headline inflation, with food prices being a key driver.

Deceleration in Food and Beverage Prices

The data for November revealed that prices of food and nonalcoholic beverages, which hold a 29.5% weighting on the consumer-price index, rose by 2.6%. This is a decrease from the 3.6% increase recorded in October.

Core Inflation at 2.0%

Core inflation, which excludes volatile prices of fresh food and government-administered goods, stood at 2.0% in November.

Stable Monthly Consumer Prices

On a monthly basis, consumer prices increased by 0.1% in November, mirroring the growth recorded in October.

Consistent with Central Bank Outlook

The latest inflation data aligns with the projections of Malaysia's central bank, which opted to maintain interest rates during its early November meeting. The central bank has foreseen moderate inflation throughout the year. The continued easing of price pressures strengthens the argument for policy easing in the coming year, although much relies on domestic inflation developments and the resilience of the economy in the face of global growth slowdown.

Inflation Risks and Outlook for Malaysia

Below are the inflation figures for various sectors in Malaysia as of November:

| Sector | Index Weighting | % Change YoY | |--------------------------------|-----------------|--------------| | Food & Non Alcoholic Drinks | 29.50% | 2.6% | | Housing, Utilities & Fuels | 23.80% | 1.7% | | Transport | 14.60% | 0.1% | | Misc Goods & Services | 6.70% | 2.3% | | Recreation Services & Culture | 4.80% | 0.6% | | Communication | 4.80% | -3.7% |