World Bank: Malaysia’s inflation among region’s lowest, but upstream cost pressures rising

The World Bank's lead economist, Apurva Sanghi, has stated that Malaysia's inflation remains among the lowest in the region, currently at 1.9% in August 2026. However, rising upstream cost pressures could pose an inflation risk later this year, with producer price inflation surging to over 11% in August. Despite this, the World Bank projects headline inflation to only rise modestly to 2% this year, thanks in part to subsidies that limit the pass-through of inflation to households.

Lower-income households in Malaysia are facing milder price pressures, with their inflation averaging only 1.2% in the first half of the year, compared to the overall headline inflation. Malaysia's economic growth has exceeded expectations, driven by external demand and supported by domestic demand, though private investment as a share of GDP remains below pre-pandemic levels. Consumer sentiment and business confidence are not showing clear upward trends.

Brief written by urgent.news from Malay Mail's own syndicated text. Machine-written — may contain errors; check the original before relying on it.