KUALA LUMPUR (Sept 23): Malaysia’s August inflation picked up slightly, driven by increases in insurance premiums, as well as higher costs of personal care and restaurants, official data showed.

The consumer price index (CPI), the country’s main gauge of inflation, rose 1.3% in August when compared to the same month in 2024, the Department of Statistics Malaysia (DOSM) said in a statement on Tuesday. The print is a tad higher than July’s 1.2% year-on-year gain but matched the median increase predicted in a Bloomberg survey.

Insurance and financial services inflation accelerated to 5.6% in August from 5.5% in July, boosted by a 14.7% surge in hospital benefit insurance premiums, higher motor vehicle insurance charges, and steady motorcycle insurance premiums.

Price gains for restaurants and accommodation services also picked up to 3.5% from 3.1% in July, lifted mainly by accommodation costs. 

Food and beverages, which account for nearly 30% of the product basket, rose 2% in August compared to 1.9% in July.

Food-at-home inflation moderated to 0.1% in August from 0.3% in July, reflecting declines in vegetables, milk, eggs and meat. Dining-out costs were steady, with food-away-from-home inflation unchanged at 4.3%.

Inflation for housing, water, electricity, gas and other fuels slowed to 1.2% from 1.3%, following a larger rebate on electricity tariffs under the revised automatic fuel adjustment.

The headline index has now remained below 2% for 25 consecutive months since July 2023, and policymakers expect inflation pressures to remain moderate with global prices under control.

Core inflation, which excludes volatile items such as food and fuel, was slightly higher at 1.9% in August, from 1.8% in July.

For the full year, headline inflation is projected to remain within the 1.5% to 2.3% range, according to Bank Negara Malaysia’s latest guidance.