In another indication that inflation is under control in Malaysia, the nation's producer price index (PPI) fell 0.8% in September from a year earlier, after a 2.8% on-year decline in August, reported the Department of Statistics Malaysia (DOSM) on Wednesday.

Malaysia's PPI in September rose 0.5% from August, following a 0.1% increase in August from July, according to DOSM.

For the whole third quarter, the Malaysian PPI slipped 0.3% on year.

Malaysia's PPI measures the prices of goods at the factory gate, when sold in bulk to distributors or retailers. It is distinct from the Consumer Price Index (CPI), which measures prices at retail, as faced by ordinary shoppers.

The PPI is considered one of the leading indicators of the CPI, as retailers try to recoup costs or pass on savings to shoppers.

The nation's manufacturing PPI, the largest component of the total PPI, declined 2.1% on year in September, pulled lower by coke and refined petroleum product price indices.

However, the agriculture, forestry and fishing sector PPI rose by grew by 7.8% on year in September, due to higher perennial crops prices.

The mining sector PPI increased by 1.1% on year in September, while electricity and gas supply PPI gained 4.6%. and the water supply PPI rose 9.1% in the same 12 months, reported the DOSM.

Separately, last week the DOSM reported that the nation's CPI has risen 1.5% on year in September.

Bank Negara Malaysia, the nation's central bank, does not have an explicit inflation target, but bank literature has stated that consumer price increases under 2% a year could be considered stable.

Bank Negara Malaysia meets next week to set interest rates and monetary policy, after voting to hold its key rate unchanged at 2.5% in September.