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2026-07-17 12:04:12
[Malaysia's June Inflation Falls to 1.9%, Fuel Subsidies and Lower Energy Prices Ease Price Pressures] 1. Data released by the Malaysian Department of Statistics on Friday showed that the Consumer Price Index (CPI) rose 1.9% year-on-year in June, slightly lower than May's 2.0% and also below the 2.0% forecast by economists surveyed by The Wall Street Journal. On a month-on-month basis, the June CPI was unchanged from the previous month, while May saw a 0.1% increase. 2. The slowdown in inflation mainly benefited from government fuel subsidies and the continued decline in global energy prices. Specifically, food and non-alcoholic beverage prices, which account for nearly 30% of the CPI basket, rose 1.4% year-on-year, a slowdown from the previous month. Core inflation, excluding volatile fresh food prices and government-managed prices, rose 1.9%, remaining at a relatively moderate level. 3. Despite recent setbacks in the ceasefire agreement between the US and Iran, analysts expect tensions to gradually ease, which is expected to reduce the geopolitical risk premium embedded in oil prices and decrease the likelihood of a new round of sustained energy price shocks. 4. Looking ahead to the full year, analysts at Public Investment Bank have lowered their full-year inflation forecast for Malaysia from 2.4% to 2.1%. The firm noted that lower Brent crude prices have reduced the urgency for the government to comprehensively adjust RON95 petrol prices. However, due to rising costs in sectors such as freight, food distribution, and utilities, the inflation rate is expected to remain above pre-Middle East conflict forecasts.
