Inflation picks up to 1.9% as transport, food prices rise

Malaysia's inflation rate rose to 1.9% in August, up from 1.8% in July, as price pressures expanded across several key spending categories, according to the Department of Statistics Malaysia (DOSM). This acceleration was particularly notable in transport, food, housing, and restaurant services.

Transport prices saw the most significant increase, with the overall transport inflation rate climbing to 2.0% in August from 1.4% in July. The rise was primarily driven by faster increases in public transport services and the operation of personal transport equipment. Public transport services themselves experienced a sharp rise to 10.5% from 6.5% in July, while personal transport equipment prices jumped to 1.8% from 1.3% in the previous month.

The cost of motor fuels also saw a notable uptick, with the average price of RON97 petrol reaching RM4.28 per litre in August, up from RM4.07 in July. Diesel prices followed suit, increasing to RM4.60 per litre from RM4.14 during the same period. The rise in fuel costs contributed to higher prices for food and beverages, which carry a significant weight (29.8%) in the Consumer Price Index.

Food and beverages, a major component of household spending, recorded an inflation rate of 1.9% in August, up from 1.8% in July. Food consumed at home increased to 1.4% from 1.2%, while food purchased away from home remained steady at 2.5%. Housing costs rose to 2.1% from 1.8%, primarily due to a revision in the electricity, gas, and other fuels sub-group, which saw a significant increase to 3.3% from 2.0%.

This was attributed to changes in the automatic fuel adjustment rate for households with high electricity consumption in Peninsular Malaysia.

Restaurant and accommodation services also rose to 2.1% from 2.0%, reflecting increased pressures in these sectors. Other notable areas with higher inflation included personal care, social protection, and miscellaneous goods and services, which saw a broad-based increase to 3.2% from 2.9%. Even on a month-on-month basis, headline inflation rose by 0.3% in August, after remaining unchanged in July.

At the state level, nine states and federal territories experienced inflation rates exceeding the national average of 1.9%. Negeri Sembilan led the way with an inflation rate of 2.5%, followed closely by Johor, Kedah, Pahang, and Labuan, all at 2.3% each. Selangor and Kuala Lumpur recorded inflation at 2.1%, while Melaka and Putrajaya were slightly lower at 2.0%. Kelantan was the only state to see a decline in food and beverage inflation in August.