The Department of Statistics Malaysia (DOSM) has recently released new data on Malaysia’s inflation rate, revealing that as of July 2023, the country’s inflation rate has dropped to 2.0 percent, marking the lowest level in the past two years. This decrease is significant when compared to the 2.6 percent inflation rate recorded in the corresponding month of the previous year.
Several factors have contributed to this decline in inflation. Firstly, the inflation index now stands at 130.5, contrasting with the 127.9 index from the same period last year. Notably, the headline inflation rate for July 2023 has shown a marginal increase of just 0.1 percent, which is lower than the rate observed in June 2023.
This reduction in inflationary pressures in Malaysia can be primarily attributed to the slower increase in costs associated with restaurants and hotels, which rose by 5.0 percent, and food and non-alcoholic beverages, which saw a 4.4 percent increase.
Furthermore, when analyzing inflation rates on a state level, it becomes clear that nine states have reported inflation rates below the national average of 2.0 percent. The state of Wilayah Persekutuan Labuan reported the lowest increase at 1.1 percent in July 2023. In contrast, six states, including Pahang (2.6%), Sarawak (2.6%), Wilayah Persekutuan Putrajaya (2.6%), Perak (2.4%), Selangor (2.4%), and Melaka (2.2%), have experienced inflation rates exceeding the national average.
Comparing Malaysia’s inflation rate with that of other nations, it’s evident that Malaysia’s 2.0 percent inflation rate is notably lower than several counterparts, including the Eurozone at 5.3 percent, the Philippines at 4.7 percent, Singapore at 4.1 percent, the United States of America at 3.2 percent, Indonesia at 3.1 percent, the Republic of Korea at 2.3 percent, and Vietnam at 2.1 percent. However, Malaysia’s inflation remains higher than that of Thailand (0.4%) and China (-0.3%).
Overall, this data reflects Malaysia’s relatively stable inflation environment compared to both regional and international counterparts, highlighting the country’s economic resilience.