KUALA LUMPUR, Jan 24 — Malaysia’s consumer price index rose 3.5 per cent annually in December, on higher cost of transport, food and non-alcoholic beverages, government data showed today.

The December annual inflation rate was in line with the 3.5 per cent forecast in a Reuters poll.

Headline inflation came in at 3.4 per cent in November.

Southeast Asia’s third-largest economy also saw 2017 full-year inflation at 3.7 per cent, within the central bank’s forecast range of 3-4 per cent.

The release of inflation data comes a day ahead of the central bank’s much anticipated decision on its benchmark rate.

Bank Negara Malaysia (BNM) is expected to raise its key rate tomorrow.

The central bank, however, may need to consider a second hike if strong growth and higher oil prices place sustained upwards pressure on inflation, ANZ said in a note.

Inflation in December was driven by a significant rise in the transportation group, which was up 11.5 per cent annually on higher pump prices, data from the Statistics Department showed.

Food and non-alcoholic beverages, which account for almost a third of CPI weightage, rose 4.1 per cent year-on-year, the department said in a statement.

Headline inflation reached an eight-year high of 5.1 per cent in March, but has since moderated. — Reuters