November inflation seen easing to 0.5%

Malaysia’s consumer price index (CPI) is expected to rise 0.5% in November from a year earlier, a Reuters poll showed, marginally slower than the previous month amid lower transport prices. Inflation has been mild since the government removed an unpopular consumption tax in June and reinstated a narrower sales and services tax (SST) three months later.

The annual inflation rate was 0.6% in October. It has been rising after hitting a three-and-a-half year low of 0.2% in August.

Economists expect any pickup in inflation due to the reintroduction of SST to be muted, softened further by the government’s decision to fix pump prices for premium RON95 petrol for the rest of the year.

Last month, Malaysia’s central bank said inflation had been largely benign in the third quarter, but was expected to edge upwards the rest of the year and into 2019.