• Inflation moderated to 1.3% yoy in February

• Food inflation remains below 1.0%

• Core inflation slows to 1.3%

• Global inflation set to turn lower amid Covid-19 outbreak

• Revised down inflation forecast to 0.7% from 1.6% in 2020

Malaysia's inflation rate expanded moderately at 1.3% yoy in February from a 20- month high of 1.6% yoy in January. Prices of durable and non-durable goods were up 1.6% yoy and 1.2% yoy respectively in February (Jan: +1.8% and +1.6%), while prices of semi-durable goods continued to decline by 0.9% yoy (Jan: -1.0%). On a monthly basis, consumer prices remained unchanged.

The increase in the overall index in February was driven by the index of miscellaneous goods & services (2.5%), transport (2.4%), housing, water, electricity, gas & other fuels (1.6%) and communication (1.5%). On the other hand, prices went up softer for food & non-alcoholic beverage (FNAB). The index for FNAB increased 0.8% yoy in February (Jan: +0.9%), while that of non-food price index up 1.6% yoy (Jan: 1.9%).

Meanwhile, the CPI for the period of January to February 2020 registered an increase of 1.4% as compared to the same period last year.

Source: BIMB Securities Research - 26 Mar 2020