Malaysia Posts First Deflation in Over 9 Years

Malaysia's consumer prices fell 0.7 percent year-on-year in January 2019, after a 0.2 percent rise in the previous month and compared to market consensus of a 0.2 percent drop. It was the first decline in consumer prices since November 2009, mainly due to a slump in cost of transport on cheaper fuel. Also, prices decreased for miscellaneous, communication, recreation and culture while they rose faster for food products.
Department of Statistics, Malaysia l Chusnul Ch Manan | 2/22/2019 11:56:07 AM
Year-on-year, prices fell primarily for transport (-7.8 vs -2.0 percent), namely fuels, given that authorities recently changed its fuel subsidy model and domestic fuel prices are now set weekly to reflect moves in global oil prices quicker. Also, cost declined for clothing and footwear (-3.3 percent vs -3.2 percent); health (-0.5 percent vs -0.4 percent); recreation services & culture (-0.4 percent vs -0.2 percent) and furnishings, household equipment & routine maintenance (-0.3 percent vs 0.1 percent); communication (-1.2 vs -1.3 percent); and miscellaneous goods & services (-2.4 percent, the same as in December). 

In addition, inflation eased for education (0.9 percent vs 1.1 percent) and restaurants and hotels (1.2 percent vs 1.6 percent). Meantime, inflation was steady for both housing, water, electricity, gas, & other fuels (at 2 percent) and alcoholic beverages & tobacco (at 1.1 percent).

On the other hand, prices of food & non-alcoholic beverages went up by 1.0 percent in January, accelerating from a 0.7 percent rise in a month earlier. The increases were driven by a rise in prices of food away from home (3.3 percent vs 2.7 percent in December), meat (2.4 percent vs 1.0 percent), fruits (1.4 percent vs 0.5 percent), and fish & seafood (1.2 percent vs -0.1 percent).

Core consumer prices rose 0.2 percent year-on-year in January, compared to a 0.4 percent gain in a month earlier and reaching the fifth straight month of rise.

On a monthly basis, consumer prices went down 0.5 percent in January, following a 0.1 percent rise in the preceding month and marking the first monthly decrease in seven months.

Malaysia Posts First Deflation in Over 9 Years