KUALA LUMPUR: Malaysia's inflation is expected to remain modest this year, broadly reflecting stable cost and demand conditions.
Bank Negara Malaysia said both headline and core inflation have moderated due mainly to lower cost pressures amid stabilising demand conditions.
"However, inflation outlook remains highly subject to changes to domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments," it said in the statement announcing the fourth quarter gross domestic product (GDP) today.
Headline inflation continued to decline to 1.6 per cent during the fourth quarter compared to two per cent in 3Q23.
The downward trend was contributed by the moderation in fresh food inflation (4Q23: 0.5 per cent; 3Q23: 1.9 per cent) and core inflation (4Q23: two per cent; 3Q23: 2.5 per cent).
Bank Negara noted that the lower core inflation was largely driven by an easing in services sub-segments, including food away from home and repair and maintenance of personal transport.
For 2023 as a whole, headline inflation declined to 2.5 per cent compared to 3.3 per cent in 2022, while core inflation averaged at three per cent compared in 2023 similar to last year.
