KUALA LUMPUR, Feb 24 — MIDF Research has maintained its average headline inflation forecast for Malaysia at 2.3 per cent this year.
The research house said moving into 2023, supply-push factors on inflation are expected to soften among others underpinned by the appreciation of the US dollar versus ringgit, moderation in food prices, further easing global supply chain pressure and milder commodity prices.
“We believe the government will keep the current fuel subsidy mechanism until the end of this year,” it said in a note today.
MIDF Research said in the environment of elevated global commodity prices, global supply chain tightness and improving domestic demand, Malaysia’s overall price growth registered at 3.3 per cent for 2022, the highest in five years.
Meanwhile, RHB Research said it has maintained its 2023 headline inflation projection for the country at 3 per cent, with the trajectory of inflation to be driven by three key factors — the momentum of economic growth, potential changes in fuel subsidy mechanism, and the movement of commodity prices.
“The balance of risk to our inflation outlook is tilted to the upside, driven by any potential changes to blanket fuel and food subsidies mechanism, global commodity price developments and risks from supply-related disruptions,” it said. — Bernama
