Overview

Malaysia registered an inflation rate of 1.2 per cent in May 2025, marking the lowest rate in 51 months

Malaysia registered an inflation rate of 1.2 per cent in May 2025, marking the lowest rate in 51 months with the index points stood at 134.4 as against 132.8 in the same month of the previous year. The slower inflation trend recorded by Malaysia as an open economy country, was in line with the inflation in other selected countries which recorded a slower increase in May 2025 namely Eurozone (1.9%), Republic of Korea (1.9%), Indonesia (1.6%) and Philippines (1.3%), in tandem with the decline in global oil prices. The decline was also reflected through Producer Price Index (PPI), local production which registered a negative 3.4 per cent in April 2025.

The Food & Beverages group increased slower at 2.1 per cent in May 2025. This was attributed by the subgroup of Food at home that did not record any changes in May 2025 as compared to April 2025 which increased 0.5 per cent. However, the subgroup of Food away from home showed a higher increase, 4.4 per cent as compared to 4.3 per cent in the preceding month.

Besides, the group of Personal Care, Social Protection & Miscellaneous Goods & Services, 3.7 per cent; Education, 2.2 per cent; Housing, Water, Electricity, Gas & Other Fuels, 1.7 per cent;  Recreation, Sport & Culture, 0.9 per cent and Alcoholic Beverages & Tobacco, 0.6 per cent also registered a slower increase in May 2025. Moreover, Transport’s group (0.7%) and Insurance & Financial Services (1.5%) increased at the same rate as recorded in the previous month.

Eleven states recorded increases below the national inflation rate of 1.2 per cent with Kelantan recording the lowest increase at 0.3 per cent in May 2025. However, five states recorded increases above the national inflation level namely Johor (1.8%), Negeri Sembilan (1.6%), Selangor (1.5%), Melaka (1.5%) and Wilayah Persekutuan Kuala Lumpur (1.4%). All states registered an increase in the inflation of Food & Beverages.

The monthly headline inflation increased 0.1 per cent in May 2025 as compared to April 2025. The increase was attributed by Restaurant & Accommodation Services (0.4%); Housing, Water, Electricity, Gas & Other Fuels (0.3%), while both Health and Education grew 0.2 per cent. In addition, Food & Beverages; Alcoholic Beverages & Tobacco and Furnishings, Household Equipment & Routine Household Maintenance inclined 0.1 per cent respectively.

Core inflation moderated to 1.8 per cent in May 2025 as compared to the preceding month (2.0%). The increase was driven by Personal Care, Social Protection & Miscellaneous Goods & Services (3.7%); Education (2.2%); Transport (2.1%) and Housing, Water, Electricity, Gas & Other Fuels (2.1%).

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