Malaysia Inflation Should Remain Manageable Despite Energy Risks

Dow Jones
08/17

0522 GMT - Malaysia's inflation should remain manageable, with targeted subsidies continuing to cushion households from near-term swings in global fuel prices, Kenanga economists say in a note. However, higher crude oil prices following stalled U.S.-Iran talks on reopening the Strait of Hormuz could raise transport, food and production costs, and prolonged disruptions could feed into consumer prices, they say. El Nino-related weather disruptions could also pressure up food inflation, they add. Kenanga maintains its 2026 Malaysia inflation forecast at 2.1%, compared with 1.4% in 2025. It expects Bank Negara to keep the policy rate at 2.75% through 2026, as underlying inflation remains contained and domestic demand resilient.

 

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