Malaysia's producer price index (PPI) declined 2.8% on year in August, on the heels of a 3.8% on-year slip in July, reported the Department of Statistics Malaysia (DOSM) on Monday.

On month, the PPI rose by 0.1% in August from July, after a 0.3% rise in July from June, added DOSM.

In general, Malaysia's PPI measures the price of goods received by domestic producers at the factory gate, usually in sles to othet businesses or organizations.

The PPI is distinct from the consumer price index, that measures prices in retail locations faced by ordinary shoppers.

However, the PPI is considered one leading indicator of the CPI, as retailers try to recoup, or pass along savings, in the cost of acquiring goods.

Malaysia's manufacturing-sector PPI recorded a 4% on-year decrease in August, due to 14.9% tumble to the price of coke and refined petroleum products, and a 7.7% decline in the price of computer, electronic and optical products.

In contrast, Malaysia's agriculture, forestry and fishing sector PPI rose by 7.3% on year in August, pushed higher by perennial crop prices.

For the utility sector, electricity and gas bills rose 4.1% on year in August, and water charges lifted by 3.4%, reported DOSM.

Unlike many central banks, Bank Negara Malaysia does not have an explicit inflation target, but has indicated in bank literature it is committed to low and stable inflation.

Bank Negara Malaysia in late July said the "Malaysian economy remains on a strong footing and is projected to expand between 4% and 4.8% in 2025."

The central bank added that it expects the nation's headline CPI "to remain moderate, averaging between 1.5% and 2.3% in 2025."