Malaysia’s CPI likely to rise at record pace in June

Malaysia’s consumer prices likely rose at their fastest pace in more than a year in June, a Reuters poll showed on Monday, as the effects of tax policy changes introduced in 2018 lapsed.

Inflation has been mild since an unpopular consumption tax was scrapped in June 2018.

The median forecast among 12 economists surveyed by Reuters was for the consumer price index MYCPI=ECI to climb 1.6 per cent from a year earlier in June, the fastest since May 2018, when it rose by 1.8 per cent.

The annual inflation rate had remained unchanged for the third straight month in May, reports Reuters.

Analysts, however, expect slowing economic growth to keep price pressures in check going forward.

“Despite a pick-up supported by a favourable base effect in June and the next few months, the overall inflationary environment globally remains subdued and is unlikely to surface as a concern for policy makers,” Standard Chartered said in a note ahead of the CPI data.

In May, Malaysia’s central bank cut its key interest rate for the first time since 2016, amid low inflation and concerns over slowing economic growth.

Bank Negara Malaysia, however, has said it expects headline inflation to be broadly more stable compared to 2018.