Led by softening bills for oil and tech goods, Malaysia's producer price index (PPI) declined 4.2% on year in June, steepening from a 3.6% on-year decline in May, reported the Department of Statistics Malaysia (DOSM) on Monday.

Malaysia's PPI fell 0.7% on month in June, and sustained a deflation in producer prices that has persisted through 2025, according to DOSM figures.

Malaysia's PPI measures prices at the factory gate, of domestic enterprises in business-to-business transactions.

The PPI is distinct from the consumer price index (CPI), which measures prices in retail locations, faced by ordinary shoppers. The PPI is generally considered one precursor to subsequent movements in the CPI, as retailers try to recoup costs or pass on savings to consumers.

In June, Malaysia's mining sector PPI declined 8% on year, due to lower natural gas prices.

The nation's manufacturing sector PPI declined 4.3% on year in June, including a 7.8% decline for computer, electronic and optical products.

Malaysia's agriculture, forestry & fishing sector PPI fell 0.3% on year in June, while the utility sector PPI fell 0.2% in the 12-month period, added DOSM.

On the consumer side, Malaysia's CPI rose 1.1% on year in June, with inflation, as measured by the metric, generally softening since August of 2022.

Malaysia's central bank, Bank Negara Malaysia, does not have an explicit inflation target, but bank literature suggests it seeks annual price hikes in the 2% range or less.

Malaysia's headline CPI is expected to rise between 1.5% and 2.3% in 2025, said the central bank, in a statement released Monday.

The nation's gross domestic product (GDP) is expected to grow by between 4% and 4.8% in the year, added Bank Negara Malaysia.