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 rate increased to 1.9% in the second quarter of 2026 from 1.6% in the previous quarter, according to Bank Negara Malaysia (BNM). Core inflation, however, decelerated to 1.9% from 2.1%, the central bank reported. BNM Governor Datuk Seri Abdul Rasheed Ghaffour stated that recent inflation surges have been driven by elevated input costs, which have not yet been fully transmitted to consumer prices.

Nearly 80% of firms are experiencing higher cost pressures, but only about half are considering passing these costs onto consumers, as demand remains subdued. Producer cost pressures are primarily concentrated at the upstream stage, with crude materials prices soaring 27.5% and intermediate inputs rising 3.7%. Finished goods prices rose by 1.4%.

BNM forecasts headline inflation to average between 1.5% and 2.5% for the year 2026, emphasizing that the overall impact of external cost pressures is expected to remain manageable.