Core inflation in Malaysia reached new peak at +3.8%yoy. As domestic demand continued on strengthening, core inflation rate touched the new peak point in Aug-22.
"On month-on-month basis, the core price growth still recorded positive growth of +0.6%mom. With this upbeat momentum, we believe BNM is very likely to raise the OPR by another 25bps in the last 2022 MPC meeting in Nov-22," says MIDF.
Food Inflation Skyrocketed
Malaysia’s food inflation increased firmly to +7.2%yoy, the highest ever recorded. Similarly, price growth of Food at Home and Away from Home touched new fresh high at +6.4%yoy and +8.4%yoy respectively.
As a net-food importer, depreciation of MYR vs. USD by -5.5%yoy in Aug-22 (close to 5-year low) had partially caused the food inflation spike.
"We maintain our average CPI forecast at +2.8% for 2022. In the environment of elevated global commodity prices and weakening USDMYR, inflationary pressure in Malaysia is affected via higher imported-food inflation.
"Moving into 3QCY22 onwards, we view the slight downward trend in global commodity prices and easing food inflation regionally may ease Malaysia’s food inflation pressure in 2HCY22," MIDF adds.