Inflation plunged 2.9% in April amidst weaker demand

• Inflation down 2.9% yoy; core inflation remains stable at 1.3%

• The slowdown in consumer demand and lower commodity prices are the key factors that pressured inflation lower

• Food inflation continued to increase

• Transport costs declined further

• Global inflation falls further

• Subdued inflation outlook

Malaysia's inflation rate dropped by 2.9% yoy in April, the steepest decrease since 2010, amid a sharp plunge in transport prices and falls in both cost of housing & utilities and clothing. The CPI had dropped for the second consecutive month in April after March’s 0.2% decline. Prices of durable goods increased 2.5% (Mar: +2.1%; Feb: +1.6%; Jan: +1.8%). Meanwhile, prices of non-durable goods deteriorated further (Apr: -9.5%; Mar: -2.6%; Feb: +1.2%; Jan: +1.6%) whilst prices of semi-durable goods continued to decline by 0.9% yoy (Mar: -0.6%; Feb: -0.9%; Jan: -1.0%). On a monthly basis, consumer prices consumer prices plunged 2.7%, the most monthly drop on record, after a 1.2% fall in March.

The CPI for the period of January to April 2020 decreased 0.1% as compared to the same period last year.

Source: BIMB Securities Research - 21 May 2020