KUALA LUMPUR, Nov 29 — MIDF Research foresees low inflationary pressure to persist in Malaysia at least until the first half of 2024 (H1 2024) amid better domestic supply chain, stabilisation of interest rate and normalisation of global commodity prices.
However, it noted that the downside risks for Malaysia’s Producer Price Index (PPI) and Consumer Price Index (CPI) in 2024 are prolonged weakness in the ringgit and surge in petrol and diesel prices following subsidy rationalisation efforts.
In a research note today, MIDF Research commented that Malaysia’s producer prices returned to deflation of -0.3 per cent year-on-year in October 2023 as the previous month registered the first inflation in eight months ro +0.2 per cent year-on-year in September 2023.
The research house said the decline was underpinned by moderating PPI inflation of crude materials by +5.3 per cent year-on-year from +5.4 per cent year-on-year in September 2023.
Prices of intermediate goods deflated further for the seventh month in a row, at -3.0 per cent year-on-year. Input inflation for finished goods softened to 16-month low at +2.2 per cent year-on-year, it said.
Against the previous month, it noted that the overall producers’ prices fell by 0.3 per cent month-on-month, while intermediate materials and finished goods costs dropped by 0.2 per cent month-on-month and 0.6 per cent month-on-month respectively, while prices of crude materials were unchanged on a month-on-month basis.
For the cumulative ten months of 2023, overall PPI fell by 2.0 per cent year-on-year while input inflation for crude materials, intermediate materials and finished goods registered -11.4 per cent year-on-year, -0.8 per cent year-on-year and +3.4 per cent year-on-year respectively, it added.
— Bernama
