• March inflation rose 1.7% yoy and 0.3% mom

• Core inflation rose at constant pace of 0.7% yoy for the fifth straight month

• Global inflation picks up pace in March

• CPI for the next few months will show a strong momentum due to low base effects

Malaysia’s CPI accelerated further by 1.7% yoy in March compared to 0.1% yoy in the previous month. March headline inflation was the second inflation recorded in this year and also marked the highest rate in 34 months, largely driven by higher prices of fuel, selected food items, miscellaneous goods & services, and furnishing & household equipment amid the economic recovery. On a monthly basis, consumer prices remained unchanged at 0.3% in March.

Non-food price index returned to inflation by 1.7% yoy (Feb: -0.6%; Jan: -1.1%), while food price index increased by +1.5% yoy (Feb: +1.4%; Jan: +1.5%). CPI without fuel, which covers all goods and services except RON95, RON97 and Diesel, increased 0.5% in March (Feb: +0.4%; Jan: +0.5%). Meanwhile, increased in durable goods price was slightly slower at 1.4% yoy (Feb: +1.7%; Jan: +1.9%). The prices of semi- durable goods declined by -0.2% yoy (Feb: -0.2%; Jan: -0.2%), while non-durable goods rebounded to 3.2% yoy (Feb: -1.1%; Jan: -2.0%).

Meanwhile, CPI in 1Q21 increased 0.5% yoy while on a quarterly basis, the CPI increased 1.8% qoq.

Source: BIMB Securities Research - 26 Apr 2021