Malaysia: Inflation rose to multi-month high in October – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting assess the latest inflation figures in the Malaysian economy.

Key Takeaways

“Headline inflation rose to a 4-month high of 2.9% y/y in Oct (2.2% in Sep). This came in above ours (2.3%) and Bloomberg consensus (2.8%). Compared to the previous month, the consumer price index (CPI) rose 0.7%.”

“Inflation averaged 2.3% y/y in Jan-Oct, implying that our full-year inflation target of 2.5% remains achievable (official forecast: 2.4%; 2020: -1.2%) as we price-in higher inflation above 3% in Nov-Dec. Looking towards 2022, upside risks to inflation have emerged following a global energy crunch, supply chain bottlenecks, and labour shortage post-pandemic, which could lead to more persistent inflation and second-round effects.”