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.
Key Highlights:
- 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.
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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.
