RHB | Malaysia | Inflation Eased To 2.6% Y-o-Y In September, No Rush For BNM To Raise Rates, 20 Oct 2014

Economic Research	20 October 2014
Malaysia
Economic Highlights
Inflation Eased To 2.6% Y-o-Y In September, No Rush For BNM To Raise Rates The headline inflation rate eased to 2.6% y-o-y in September, the lowest in a year, from +3.3% in the previous month and compared with +3.2% in July. Price pressure eased during the month due to the high base effect in September 2013 when the Government raised the fuel price during the month. The lower inflation in September was reflected in a slower increase in the prices of food & non-alcoholic beverages and the core inflation rate. Inflation is expected to stay elevated in the 4Q, after the Government raised fuel prices by about 10% in October. It will likely be compounded by the introduction of the GST in April 2015. As a result, we expect inflation to jump significantly to 4.2% in 2015, up from +3.4% estimated for 2014 and compared with a low of +1.6% in 2012. Economist:  Peck Boon Soon  | +603 9280 2163 Economist:  Shafizal Shafaai  | +603 9280 2179