Malaysia: Inflation rose 2.5% in 2021 – UOB
Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group assesses the latest inflation data in the Malaysian economy.
Key Takeaways
“Headline inflation held above the 3.0% level at 3.2% y/y in Dec 2021 (Nov: +3.3%), in line with our estimate and Bloomberg consensus (both at 3.1%). This brought 2021 full-year inflation to an average of 2.5%, matching our full-year projection (MOF est: 2.4%; 2020: -1.2%).”
“December’s inflation outturn primarily reflected higher prices of food, furniture & furnishing, household appliances, recreation services & culture, restaurant & hotels, personal care, and financial services. Food prices as a whole posted the largest gain in nearly 4 years at 3.4% last month, with a broad-based increase across prices of food at home and away from home.”
“We expect inflation to average 3.0% in 2022 (MOF est: 2.1%) amid upside risks coming from prolonged global supply chain bottlenecks, post-pandemic labour shortages, volatile commodity prices, expiry of government’s price control schemes, and potential subsidy rationalization programs. That said, a sanguine outlook on the economic recovery coupled with more aggressive monetary policy tightening by Fed could trigger a more hawkish tilt in Bank Negara Malaysia’s (BNM) policy stance this year.”
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
