KUALA LUMPUR: Malaysia's consumer prices are expected to fall in January, the first decline in nearly a decade, amid a drop in domestic fuel prices, a Reuters poll showed today.
Malaysia's consumer price index in January was forecast to fall 0.2% from a year earlier, the first decline since November 2009 when it fell 0.1%, according to the median estimate among 13 economists surveyed.
Individual estimates, however, ranged between an annual decline of 0.8% and a rise of 0.5% in the index.
Malaysia's decision to switch to a weekly managed float mechanism for retail fuel in January as well as lower global crude oil prices likely weighed on transport costs, economists in the poll said. Inflation has been benign since the government removed an unpopular consumption tax in June 2018 and reinstated a narrower sales and service tax three months later.
Annual inflation in November and December were 0.2%, matching the rate in August when it touched a three-and-a-half-year low.
The central bank said last week Malaysia was not at risk of deflationary pressure. Headline inflation, which came in at 1% in 2018, was likely to average higher this year, Bank Negara Malaysia said.
"Inflation remains distorted by administrative measures – the central bank will likely focus on the growth metric for monetary policy decision making," Standard Chartered said in a note ahead of the CPI data.
