Malaysia’s inflation outlook steady at 1.5–2.5 pc, BNM stresses external pressures remain manageable

KUALA LUMPUR, Aug 14 — Malaysia's headline inflation reached 1.9 per cent in the second quarter of 2026, up from 1.6 per cent in the previous quarter, according to Bank Negara Malaysia (BNM). Core inflation, meanwhile, decreased to 1.9 per cent from 2.1 per cent. Governor Abdul Rasheed Ghaffour stated that recent increases in input costs have not yet significantly impacted consumer prices.

Approximately 80 per cent of firms are currently facing higher cost pressures, but only around half of them plan to pass these costs onto consumers due to weak demand. The producer cost pressures were primarily concentrated at the upstream stage, with crude materials prices surging 27.5 per cent and intermediate inputs rising 3.7 per cent, while finished goods prices only increased by 1.4 per cent.

BNM projects headline inflation to average between 1.5 and 2.5 per cent in 2026, emphasizing that the overall impact of external cost pressures is expected to remain contained.