KUALA LUMPUR (July 27): An extreme El Niño weather could drive up Malaysia's electricity consumption and disrupt food supply chains, adding to inflationary pressures, the economy minister said on Monday.

Although peak electricity demand has risen by about 2.5 gigawatts, Datuk Seri Akmal Nasrullah Mohd Nasir warned that hotter weather could further increase energy demand, particularly from households, as the use of cooling equipment rises.

Speaking at the ministry’s monthly assembly, Akmal also cautioned that weather-related disruptions to food supply chains could stoke inflation.

“Changes in weather conditions are another area that we need to monitor closely,” he said. “Any disruption to the food supply chain would have implications for inflation and related issues.”

He said rice stocks are sufficient through the end of the year, while prices of some food items, including meat and vegetables, have eased despite continued fluctuations in the prices of essential goods.

This year’s El Niño, which brings hotter and drier conditions and could push temperatures above 40°C, is forecast to occur between October this year and January 2027.

"This has become a key challenge for the Ministry of Economy because, during the first half of the year, we had to deal with the global supply crisis. As a result, our discussions and narrative on longer-term plans may have been delayed or shifted towards addressing more immediate crises," he added.

In addition, Akmal flagged continued geopolitical tensions in West Asia as a key downside risk, warning that continued uncertainty could keep fuel prices volatile.

"It is still uncertain when the situation will be fully resolved,” he said. “Although our resilience has improved and we are in a more comfortable position, the concern is that those conditions could return.”