Malaysia’s Inflation Eases to 1.8% in November, First Decline Since 2021

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Malaysia’s inflation rate dipped to 1.8% in November 2024, down from 1.9% in October, marking the first decline since August 2021, according to the Department of Statistics Malaysia (DOSM). The consumer price index (CPI) for November registered at 133.3, slightly lower than October’s 133.4 but higher than 130.9 in November 2023.

Key Drivers of Inflation Decline

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin attributed the decline to deflation in specific sectors, including:

• Information and Communication: A sharp fall of -2.3% (October: -1.7%), driven by reduced costs in information and communication services (-4.4%).
• Transport: A decrease to -0.2% (October: 0.7%), reflecting slower growth in vehicle maintenance and declining vehicle prices due to promotional rebates.
• Clothing and Footwear: A continued decrease of -0.1% (October: -0.2%).

Annual Comparison

On an annual basis, the inflation rate rose from 1.5% in November 2023 to 1.8% in November 2024. Key contributors to this increase were:

• Food and Beverages: Increased by 3.7%, reflecting higher costs in staples.
• Personal Care, Social Protection, and Miscellaneous Goods: Grew by 3.4%, driven by rising costs of essential services.
• Restaurant and Accommodation Services: Up 2.8%, indicating robust consumer spending in this category.

Sector-Specific Trends

• Transport: Inflation eased, with notable reductions in vehicle purchases (-0.6%) and slower growth in car servicing and motorcycle repair costs. Diesel prices remained steady at RM2.95 per litre in Peninsular Malaysia, while RON97 petrol showed a -8.1% decrease compared to the previous year.
• Housing, Water, Electricity, Gas, and Other Fuels: Recorded a 3.2% increase (October: 3.1%), highlighting steady growth in utility-related costs.
• Education: Inflation remained consistent at 1.5%, as did alcoholic beverages and tobacco at 0.8%.

State-Level Inflation

Five states recorded inflation rates above the national average of 1.8%:

• Penang: 2.9%, the highest in the country.
• Pahang: 2.4%.
• Selangor: 2.1%.
• Johor and Sarawak: 1.9% each.

Global Comparison

Malaysia’s inflation rate remains relatively low compared to other nations:

• Higher than Indonesia (1.6%), South Korea (1.5%), Thailand (1.0%), and China (0.2%).
• Lower than Vietnam (2.8%) and the Philippines (2.5%).

Outlook

Dr. Mohd Uzir emphasized that the moderation in inflation reflects effective fiscal measures and steady economic conditions. However, rising food costs and consistent increases in certain service sectors highlight the need for vigilance as Malaysia enters 2025.

With inflation stabilizing, the government may have greater flexibility to focus on growth initiatives and address structural challenges in key industries, supporting continued economic recovery.