Bank Negara estimates Malaysia’s inflation to be between 2-3.5% in 2025 with RON95 targeted subsidy

Malaysia’s inflation is projected to average between 2% and 3.5% in 2025, according to Bank Negara Malaysia. The central bank’s governor, Datuk Seri Abdul Rasheed Ghaffour, said the estimates factor in domestic policy measures outlined in Budget 2025, including the implementation of targeted RON 95 petrol subsidies as well as the expanded scope of the sales and service tax (SST).

“Year-to-date, both headline and core inflation averaged 1.8% and are expected to remain modest for the remainder of the year,” said Abdul Rasheed, as reported by NST and Malay Mail. He added that headline and core inflation remained stable at 1.9% in the third quarter of 2024.

“While there were pockets of higher inflation for selected items, such as diesel (20.1%, up from 5.3% in Q2 2024) and vehicle insurance (0.8%, up from -0.1% in Q2 2024), this was offset by broader moderation for food and beverages inflation (1.6%, down from 1.9% from Q2 2024) during the quarter,” he continued.

Overall, the share of consumer price index (CPI) items recording monthly price increases was lower at 38.9% in Q3 2024 compared to 48.4% in Q2 2024.

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