Malaysian headline inflation likely to have accelerated slightly in October

The Malaysian headline inflation data for the month of October, which is set to be released this week, is expected to have accelerated slightly. According to a DBS Bank research report, the consumer price inflation is likely to have accelerated to 0.6 percent on a year-on-year basis from September’s 0.3 percent.

The reintroduction of the Sales and Services Tax after the GST was scrapped, might essentially see inflation accelerating gradually in the months ahead. Yet, growth momentum is decelerating, which suggests softer demand-pull price pressure.

“Indeed, while we expect inflation to rise above the 1 percent level in the coming months, overall inflation outlook remains subdued. There is risk that full year inflation could come in lower than our previous forecast of 1.3 percent”, added DBS Bank.