KUALA LUMPUR, May 15 — Malaysia’s headline inflation increased to 1.6 per cent in the first quarter of 2026 (Q1) from 1.3 per cent in Q4 2025, while core inflation moderated to 2.1 per cent from 2.3 per cent previously, said Bank Negara Malaysia (BNM).
The central bank said the higher headline inflation reflected some initial cost pass-through of higher global cost pressures, partly due to the conflict in West Asia.
“Electricity charges and fuel prices, mainly RON97 and diesel, increased during the quarter, which led to slower declines in electricity (-6 per cent; Q4 2025: -10.3 per cent) and fuel inflation (-1.5 per cent; Q4 2025: -1.9 per cent),” it said in a statement today.
However, BNM said these increases were partly offset by lower core inflation, mainly reflecting softer inflation in food away from home (2.4 per cent; Q4 2025: 2.8 per cent) and rental inflation (1.6 per cent; Q4 2025: 1.9 per cent).
“Inflation pervasiveness, measured by the share of Consumer Price Index items registering monthly price increases, continued to decline to 38.3 per cent during the quarter (Q4 2025: 39.6 per cent), trending well below the historical first quarter average of 52.2 per cent,” it added.
On the inflation outlook for the year, BNM said 2026 headline inflation is projected to average between 1.5 per cent and 2.5 per cent this year.
“Following the West Asia conflict, inflation is expected to edge higher due to elevated global energy and other key commodity prices, broadly in line with expectations.
“In the absence of excessive demand pressures, existing policy measures — including targeted fuel subsidies and other mitigation measures — are expected to help limit near-term spillovers to broader inflation,” it said.
BNM added that the extent and pace of pass-through to domestic prices from the ongoing conflict will also depend on firms’ pricing behaviour and demand conditions.
