Malaysia Consumer Price Index - 29 May 2023

Cooled to an 11-month low in April as food prices saw its first MoM deflation since May 2021

The headline inflation continued to slow to 3.3% YoY in April (Mar: 3.4%), matching house estimate and market expectations:

  • The moderation in consumer prices was mainly due to a MoM deflation in food (-0.1% MoM; Mar: 0.1%) and restaurant & hotel prices (-0.1% MoM; Mar: 0.3%).
  • On a monthly basis, CPI increased at an unchanged rate of 0.1% MoM as the deflation in food prices was equally offset by a rise in transport costs (0.3% MoM; Mar: -0.2).
  • Core inflation cooled further to 3.6% YoY as this component remained unchanged (0.0%) on a MoM basis, partly attributed to a decline in core restaurant & hotel costs.

The moderation was broad-based, with reduced price pressures recorded in food and restaurant & hotel components:

  • Food & non-alcoholic beverages (6.3%; Mar: 6.9%): fell to its lowest level in 10 months as food prices at home decelerated to 5.3% (Mar: 6.0%) due to a moderation in almost all subcomponents, particularly vegetables (0.7%; Mar: 3.4%). This decline can be partly attributed to the government's festive season maximum price scheme.
  • Restaurant & hotel (6.6%; Mar: 7.2%): edged lower due to reduced expenses in restaurants (6.8%; Mar: 7.0%) during the month of Ramadhan amid subdued demand for hotel’s buffet and a drop in lunch crowd. Additionally, accommodation costs also decreased (6.2%; Mar: 7.7%) as a result of various promotions during the Hari Raya celebration.
  • Transport (2.3%; Mar: 2.4%): continued its growth descent for the seventh consecutive month. However, the component recorded the fastest MoM increase (0.3%; Mar: -0.2%) since July 2022, mainly driven by a rebound in the cost of air transport (3.8% MoM; Mar: -6.5%), which reflects further recovery in the tourism industry.