UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting assess the recently published inflation figures in Malaysia

Key Takeaways

“Headline inflation reverted higher to 2.3% y/y in Apr after moderating for its fourth straight month to 2.2% in Mar. The reading matched our estimate and Bloomberg consensus. It was largely lifted by costlier food & non-alcoholic beverages, transportation, recreation services & culture, expenditure in restaurant & café, as well as education.”

“Overall price pressure is expected to pick up on the back of persistent global supply shortages, higher commodity prices, the lapse of favourable base effects, and currency weakness. Recovering domestic economic activities and higher private-sector wages amid ongoing labour shortages are also posing upside risks to inflation. Taking these factors and the government’s short-term measures to tackle the rising costs of living and supply shortage issues into considerations, we maintain our 2022 full-year headline inflation forecast at 3.0% (BNM est: 2.2%-3.2%, 2021: 2.5%).”