KUALA LUMPUR, Oct 20 — MIDF Research has maintained Malaysia’s Consumer Price Index (CPI) forecast at three per cent for 2023 on softening inflationary pressure, even as the depreciated ringgit remains a downside risk factor for domestic food prices.
In a research note today, it estimated food inflation will remain at 5.5 to six per cent in the second half of the year, due to an externally challenging environment, especially for global agriculture output.
“Prolonged depreciated ringgit, among others, will lead to higher imported inflation, particularly via food prices as Malaysia is a net importer for most food products,” MIDF Research said, adding that non-food inflation is expected to average at 1.5 per cent.
Meanwhile, RHB Investment Bank has also maintained its projection of the headline and core inflation for 2023 at 2.6 per cent year-on-year (y-o-y) and 3.1 per cent y-o-y, respectively.
It also maintained the 2024 headline and core inflation forecast at 3.3 per cent y-o-y and 3.6 per cent y-o-y, respectively.
“In the near to medium term, we remain watchful on the potential upside risk of higher food and commodity prices.
“For 2024, the inflation trajectory would mainly be driven by changes in domestic policies, i.e. revision in services tax coupled with the implementation of targeted subsidies approach,” RHB Investment Bank said.
The Department of Statistics Malaysia announced today that Malaysia’s inflation eased to 1.9 per cent in September, with the index points registered at 130.8 from 128.3 in the same month of the previous year.
The inflation for the third quarter of 2023 inclined two per cent to 130.7 compared with 128.1 in the same quarter of the preceding year.
— Bernama
