• May inflation rose by 4.4% yoy and 0.0% mom

• Core inflation rose by 0.8% yoy

• Higher global inflation due to base effect and increasing global oil prices

• Inflation’s transitionary factors to normalize for the rest of 2021

Malaysia’s CPI rose slower by 4.4% yoy in May compared to 4.7% yoy in the previous month. May headline inflation marked the second month of inflation above the upper level of BNM inflation projection 2021 of 2.5-4.0%. The inflation data continued to remain high following the low base effect, higher prices of fuel, energy, utilities, vegetable oil, foods, and household items. On a monthly basis, consumer prices were flat as compared to 0.2% in the previous month.

Non-food price index increased slower of 5.9% yoy (Apr: +6.1%; Mar: +1.7%; Feb: - 0.6%; Jan: -1.1%), while food price index increased by +1.5% yoy (Apr: +1.9%; Mar: +1.5%; Feb: +1.4%; Jan: +1.5%). CPI without fuel, which covers all goods and services except RON95, RON97 and Diesel, increased 1.6% in May (Apr: +1.7%; Mar: +0.5%; Feb: +0.4%; Jan: +0.5%). Meanwhile, increased in durable goods price was slightly slower at 1.1% yoy (Apr: +1.3%; Mar: +1.4%; Feb: +1.7%; Jan: +1.9%). The prices of semi- durable goods declined by -0.4% yoy (Apr: -0.3%; Mar: -0.2%; Feb: -0.2%; Jan: -0.2%), while non-durable goods spiked to 10.8% yoy (Apr: +11.4%; Mar: +3.2%; Feb: -1.1%; Jan: -2.0%).

The CPI for the period of January to May 2021 increased 2.1% as compared to the same period last year.

Source: BIMB Securities Research - 28 Jun 2021