Core Inflation Also Improved to 2.2% Yoy in November

Malaysia’s headline inflation improved from 3.7% yoy in October to 3.4% in November, in line with market expectations. The cost of food and non-alcoholic beverages, which has the biggest share in CPI basket, moderated by 4.0% yoy in November (4.4% in October). This was due to lower prices of food at home, which improved from 3.2% yoy in October to 2.9% in November, as reflected in meat, oils and fats, as well as vegetables. Meanwhile, cost of transport remained high at 10.8% yoy in November, albeit slightly lower than the previous month of 12.1%. On month-on-month basis, cost of transport rose sharply by 3.3% during the month as compared to -0.2% mom in October, attributed to higher global crude oil prices. Domestic retail petrol prices (RON 95) rose by an average of RM2.30 per litre in November, higher than RM2.18 per litre in October, while RON 97 rose to an average of RM2.59 per litre in November, from RM2.48 per litre in October. However, other CPI components, including cost of clothing & footwear, furnishing and household equipment, health, communication, as well as education improved in the month of November. Cost of housing and utilities eased by 2.2% yoy in November after posting 2.4% in October. Cost of alcoholic, beverages & tobacco, recreation services & culture, restaurant & hotel increased slightly in November.

Source: Affin Hwang Research - 21 Dec 2017