KUALA LUMPUR (July 27): Food inflation is a key risk for Asean economies in the coming months as higher costs and adverse weather conditions begin to feed through to consumers, according to a multilateral office.
While price pressures in the region remain broadly contained and will average 3.6% this year, higher petrochemical prices will affect fertilisers and in turn make food more expensive, said Asean+3 Macroeconomic Research Office (Amro).
Renewed escalation in the Middle East conflict could push up energy, shipping and food costs, while weather-related disruptions could add pressure to agricultural prices, Amro said.
The forecast is for crude oil prices to average around US$75-US$85 per barrel this year and US$65-US$75 per barrel next year, lower than assumptions made in its June update following easing concerns over oil supply disruptions.
Food prices are an area Amro monitors closely, as higher input costs and adverse weather conditions could add further upward pressure, Amro economist Allen Ng told a virtual briefing of its July update of the Asean+3 Regional Economic Outlook report.
Malaysia may be less vulnerable to rising food prices than some regional economies due to its commodity exports, although it would still face indirect effects through higher transportation costs, weaker external demand and financial market volatility, he noted.
Amro had raised its 2026 growth forecast for Malaysia to 4.9% from 4.6% previously, supported by stronger-than-expected exports and investment, particularly in AI-related industries and data centres.
Cambodia, for instance, has been among the Asean economies facing more pronounced food inflation, said Amro chief economist Dong He. Food accounts for about 45% of Cambodia’s consumer price index basket.
Amro’s headline inflation forecast for Cambodia is 5.1% amid higher oil prices and disruptions to food supply chains following border tensions with Thailand. Food prices in Cambodia are expected to stay elevated through the second half of the year before moderating later in 2026, He added.