KUALA LUMPUR, Sept 22 — Malaysia’s inflation rate is slowing, yet the cost of a meal or a basket of groceries can still feel high for households.

If inflation is falling, why do a plate of nasi lemak, a basket of groceries or a meal at a restaurant still cost more than they did a year or two ago?

When someone says, “It is because of inflation”, what does that actually mean?

Inflation measures how quickly the overall prices of goods and services are rising, rather than whether prices themselves are high or low.

When inflation falls, prices can continue to increase — only at a slower pace.

Take a plate of nasi lemak that costs RM5.

If its price rises to RM5.50 the following year, that is a 10 per cent increase and if it then rises to RM5.61 the year after, the increase is about 2 per cent.

The nasi lemak still costs RM5.61, even though inflation has fallen from 10 per cent to 2 per cent.

What is inflation, how does it affect pricing?

To break it down, inflation is the rate at which the overall prices of goods and services increase over time.

It does not mean every product becomes more expensive by the same amount.

So, when someone says, “It’s inflation,” they are usually referring to a broader rise in prices.

Inflation itself, however, does not explain why a particular item has become more expensive.

For the nasi lemak, we need to look at its ingredients and other costs.

Did ingredients, wages, rent or other operating costs increase?

Those are possible drivers of a price increase, while inflation measures the broader movement across the economy.

Prices can still rise

According to the Department of Statistics Malaysia (DOSM), Malaysia’s headline inflation eased from 1.9 per cent in June to 1.8 per cent in July 2026.

The July figures also show why the 1.8 per cent rate should not be interpreted as every item becoming 1.8 per cent more expensive.

For example, DOSM found that 374 of the 573 items in the CPI basket recorded price increases in July, while another 157 items declined, and 42 remained unchanged.

Of the 374 items that increased, 367 recorded increases of 10 per cent or less.

DOSM also reported that annual inflation averaged 1.4 per cent in 2025, down from 1.8 per cent in 2024.

What is getting pricier?

The latest food data shows why it is useful to look beyond the headline figure.

DOSM reported that Food and Beverages inflation increased from 1.4 per cent in June to 1.8 per cent in July 2026, while the group rose 0.3 per cent month-on-month.

Meat prices increased 3.2 per cent year-on-year, with chicken recording a particularly strong increase, from RM10.25 per kg in 2025 to RM10.88 per kg in 2026.

Chicken inflation itself was 6.7 per cent.

As for food away from home, this increased 2.5 per cent, while food at home rose 1.2 per cent.

Other categories recorded smaller increases with fish and other seafood rose 1.1 per cent, fruits and nuts 1.1 per cent, vegetables 1 per cent, and milk and other dairy products and eggs 0.8 per cent.

Cereals and cereal products, as well as oils and fats, each increased 0.2 per cent.

Prices can also fall

Food prices do not always move upwards.

According to DOSM’s annual 2025 data, Food and Beverages inflation was 2.1 per cent, but several food-at-home categories recorded price declines.

Vegetables fell 4.4 per cent, milk and other dairy products and eggs fell 0.9 per cent, while meat and cereals and cereal products each fell 0.3 per cent.

A household buying more chicken or eating out regularly could therefore feel a stronger increase than one buying more vegetables or cereals.

What about our neighbours?

Malaysia’s experience is not unique.

Food prices can remain relatively contained when supply conditions are favourable, although individual items can still rise.

In Indonesia, Bank Indonesia reported that volatile-food inflation eased to 2.52 per cent year-on-year in July 2026, from 5.58 per cent in June.

This is partly due to harvests of chilli varieties and shallots, while also pointing to coordination between the central and regional governments to control food inflation.

Thailand provides another example, whereby its Trade Policy and Strategy Office reported that food and non-alcoholic beverage prices rose 0.98 per cent year-on-year in April 2026.

Prepared food and some fresh vegetables became more expensive, while several fruits and other food items recorded declines.

Harvests, supply, transport costs, global commodity prices and government measures can all affect what consumers pay.

So, what has been happening in Malaysia?

The moderation reflected factors including lower cost pressures and a stronger ringgit, which helped contain the cost of imported goods and inputs.

Bank Negara also pointed to lower global cost pressures and fuel prices as factors that helped keep inflation contained.

These factors can reduce some of the pressure on businesses and consumers.

However, they do not mean prices have returned to where they were before earlier increases.

Why meals stay expensive

The price of a plate of nasi lemak is not determined only by the cost of rice, coconut milk, anchovies or eggs.

The seller also has to pay for labour, rent, utilities, transportation, packaging and other operating expenses.

So even if the price of one ingredient falls, the final price paid by the customer does not necessarily fall by the same amount.

There can also be a time lag between a change in an input cost and the price consumers see. 

Food prices are also influenced by costs beyond the stall or supermarket such as global commodity prices and movements in the ringgit, which can affect domestic costs.

What does it mean for households?

For households, falling inflation means prices are rising more slowly — it does not mean the nasi lemak has returned to RM5.

Falling inflation is not the same as falling prices, and it also does not erase previous price increases. 

Bank Negara Malaysia (BNM) reported that between 2019 and 2024, Malaysia’s headline CPI increased 9.3 per cent, while nominal wages per worker increased by 7.2 per cent.

This does not mean every household experienced those exact changes, instead, it illustrates why households can continue to feel pressure even when the latest inflation rate is relatively low.

A period of lower inflation means prices are not rising as quickly.

So, when the headline inflation rate falls, the question is not simply whether prices are going down, it is also which are rising, which are falling, and whether household incomes are keeping pace.

That is why Malaysians hear inflation is falling yet still feel that their groceries, takeaway meals or favourite nasi lemak are expensive.