Malaysia’s consumer price index rose 3.5 percent annually in December, on higher cost of transport, food and non-alcoholic beverages, government data showed on Wednesday.
The December annual inflation rate was in line with the 3.5 percent forecast in a Reuters poll. Headline inflation came in at 3.4 percent in November. Southeast Asia’s third-largest economy also saw 2017 full-year inflation at 3.7 percent, within the central bank’s forecast range of 3-4 percent.
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 on Thursday.
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 percent 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 percent year-on-year, the department said in a statement.
Headline inflation reached an eight-year high of 5.1 percent in March, but has since moderated. Reuters