Capped by healthcare and transport bills, Malaysia main inflation gauge remained muted in January, in line with central bank expectations.

Malaysia's consumer price index (CPI) rose 1.6% on year in January, unchanged from December, reported the Department of Statistics Malaysia (DOSM) on Thursday.

On month, prices rose 0.1% in January, after a 0.3% monthly rise in December, added the DOSM.

Capping consumer bills in January was a 0.7% on-year drop in the cost of transportation, and a modest 1.4% rise in health care costs. The category of housing, water, electricity, gas & other fuels rose 1.2% on year.

In moderate contrast, Malaysia consumers faced prices up 5.5% on year in January for insurance and financial Services, and 3% higher in restaurant and accommodation services, reported DOSM.

Unlike many central banks, Bank Negara Malaysia does not have an explicit inflation target, but bank literature and policy adjustments indicate rates below 3%, and preferably near 2%, are sought.

In late January, Bank Negara Malaysia that the nation's headline inflation was "expected to remain moderate amid the continued easing in global cost conditions. Global commodity prices are expected to remain modest, contributing to contained domestic cost conditions."

The central bank added, "core inflation in 2026 is expected to remain stable and close to its long-term average, reflecting continued expansion in economic activity and the absence of excessive demand pressures."