KUALA LUMPUR, MALAYSIA – Media OutReach – August 24, 2023 – The Department of Statistics will release monthly inflation data for Malaysia on August 25. Annual inflation is expected to decline to 2.1% in July.
According to official data released last month, Malaysia’s annual inflation rate slowed to 2.4% in June 2023 from 2.8% in May. Lower inflation rates were recorded in food and non-alcoholic beverages, transportation, and miscellaneous goods and services.
Overall, inflation in Malaysia was lower than neighboring regions, with June inflation in Indonesia, the Philippines and Singapore at 3.5%, 5.4% and 4.5%, respectively.
Malaysia’s economic growth is expected to end the year near the lower end of the 4.0% to 5.0% range, contributing to lower annual inflation in the second half of 2023.
According to Kar Yong Ang, financial markets analyst at OctaFX, annual inflation will fall further in July, the fifth consecutive month of decline. Such a drop cannot be ignored by the BNM, which will have to signal a weakening of monetary policy or revise the annual inflation forecast.
“The BNM will probably choose to revise its annual inflation forecast slightly downwards. Even if the regulator does not, the local currency still tends to appreciate due to the continued growth of the Malaysian economy. said Kar Yong Ang. ‘With domestic demand picking up amid improving employment and falling inflation, the ringgit could appreciate, with USDMYR falling towards 4.520 and possibly lower.
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