KUALA LUMPUR (June 29): Malaysia’s factory-gate prices accelerated in May and rose at their fastest pace in four years mainly driven by commodities amid mounting pressures from West Asia conflicts.
The producer price index, which tracks inflation at the wholesale level before it reaches the consumers, climbed 7.8% year-on-year in May, according to official data released on Monday. The reading was the highest since June 2022 and was also sharply higher than April’s 5.4% increase.
Data out earlier showed consumer prices — the preferred gauge of inflation for the government and the central bank — accelerated to the fastest in nearly two years as the increase in prices of food sped up.
The rate, however, was lower than that of producer price thanks to a system of subsidies and price control on essential goods and services.
The data dovetails with producer price trend in Asia, largely driven by higher global energy prices and strong demand for semiconductor and technology-related products.
The mining index, in particular, saw a surge of 53% in producer prices due to crude petroleum subsector.
While crude oil prices per barrel have moderated from US$120.42 (RM489.63) per barrel in April 2026, prices remained elevated in May due to supply disruptions from geopolitical tensions in the Middle East, said Datuk Seri Dr Mohd Uzir Mahidin, chief statistician at the Department of Statistics Malaysia.
Palm oil prices were also higher on a year-on-year basis, supported by expectations of lower seasonal production and sustained biodiesel demand in the region, he said.
The index covering the manufacturing of computer, electronic and optical products grew 5.7% in May while water supply subindex rose 11.2%. Electricity and gas supply sector went up by 10% year-on-year.
On a month-on-month basis, the overall index was 1.1% higher, slowing from April’s 3.2% increase.