Background Summary 

CPI came in at 1.9% in September – Inflation rate declined to 1.9% in September 2023, while core inflation remained at 2.5%.

Growth improved in the 3Q2023 – Based on advanced estimates, Malaysia’s economy grew by 3.3%.

Our take 

Inflation expectation – Inflation in 2024 is expected to fall within a range of 2.5% to 3.5%, considering the effects of subsidy rationalisation and the impact of the services tax increase. However, there is an upside risk to this outlook if the scope of rationalisation extends to RON95 fuel.

Growth view for 2024 – The economic growth forecast for Malaysia remains at 4.0% for 2023 and is expected to pick up to 4.5% in 2024. The weak export sector is anticipated to recover in 2024 due to easing inflationary pressures in major economies. On the domestic front, measures announced in Budget 2024, particularly those aimed at boosting consumption, are anticipated to support economic growth. However, the impending subsidy rationalisation, which includes food and fuel later in 2024, may lead to changes in consumer spending priorities.

Source: AmInvest Research - 23 Oct 2023