KUALA LUMPUR, May 16 (Bernama) -- Headline inflation is expected to remain moderate at below three per cent in 2025, given the further easing in global cost conditions and the absence of excessive demand conditions, said Bank Negara Malaysia (BNM) Governor Datuk Abdul Rasheed Ghaffour.
However, he said a new inflation forecast range will likely be announced as the central bank reviews the updated gross domestic product (GDP) projections in the near future.
“Sustained moderation in global commodity prices will likely contribute to continued moderate cost conditions.
“Within this benign cost environment, the overall effect of the announced domestic policy reforms on inflation is expected to be limited,” he said during a press conference on Malaysia’s first quarter 2025 (1Q 2025) GDP performance today.
Externally, risks to inflation may stem from uncertainties in global developments surrounding global commodity prices and financial markets, while trade policies among key economies could shape the path of inflation, he said.
Domestically, Abdul Rasheed said the outlook remains subject to the overall impact of domestic policy reforms, particularly subsidy rationalisation.
In 1Q 2025, headline inflation declined to 1.5 per cent, while core inflation rose to 1.9 per cent due to lower utilities and mobile services inflation, which was partially offset by higher rental inflation.
“The moderation in headline inflation is broadly in line with the overall easing cost environment. Moreover, the moderation also reflected dissipated effects of past domestic policies, which resulted in lower utility inflation, as well as lower inflation for mobile services amid price reductions for selected postpaid plans.
“Conversely, core inflation edged higher during the quarter due to higher rental inflation,” he said.
-- BERNAMA
