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Malaysia Inflation July 2024

Malaysia: Inflation remains at joint-lowest level since April in July

Inflation was stable at June’s 2.0% in July. July’s reading marked the joint-lowest inflation rate since April. Looking at the details of the release, prices for food and non-alcoholic beverages rose at a slower pace in July, and prices for housing and utilities plus transport grew at largely steady rates compared to the previous month’s reading. Meanwhile, hospitality price pressures strengthened.

The trend was unchanged, with annual average inflation coming in at June’s 1.8% in July.

Finally, consumer prices rose a seasonally adjusted 0.08% in July over the previous month, below June’s 0.15% rise. July’s result marked the weakest reading since November 2023.

United Overseas Bank analysts Julia Goh and Loke Siew Ting commented on the outlook for inflation and monetary policy:

“Given that our full-year inflation forecast stays at the lower bound of BNM’s target range which has factored in some impact of the government’s subsidy cuts including fuel, the rising inflation pervasiveness does not appear to be a point of concern for the central bank at this juncture. We believe BNM will continue to guard against the second-round effects of robust domestic demand and favorable labor market conditions on inflation over the coming quarters. This will support an extended interest rate pause at 3.00% for the rest of the year.”

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