Malaysia’s inflation is forecast to remain low and stable, with SST expansion offset by fuel subsidies and a stronger ringgit, says MBSB IB.
KUALA LUMPUR: Malaysia’s inflation is expected to remain low and stable moving forward, according to MBSB Investment Bank Bhd.
The expanded sales and service tax may introduce modest upward pressure on prices, the investment bank said in a note.
However, this could be partially offset by the continuation of the RON95 fuel subsidy, a firmer ringgit, and easing global food prices.
ALSO READ: Malaysia’s inflation edges up to 1.4% in November 2025
“The exclusion of micro, small and medium enterprises from the BUDI95 targeted fuel subsidy poses an upside risk to inflation,” MBSB IB cautioned.
It explained that higher fuel costs for these businesses could be passed through to consumer prices.
The bank’s outlook follows data showing the producer price index eased further by 1.8% in November.
This marked the steepest decline since August and extended a nine-month streak of deflation.
The decline was largely reflected in a sharp 9.7% year-on-year drop for the agriculture, forestry and fishing sector.
Prices for the growing of perennial crops index fell by 16.2% year-on-year.
PPI deflation in the mining sector also fell steeper by 7.2% year-on-year.
This was dragged down by the extraction of crude petroleum and natural gas indices, which fell 5.5% and 11.4% respectively. – Bernama
