KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB Research) anticipates inflation to rise in 2025, driven by domestic policy reforms such as the rationalisation of the RON95 subsidy and the expanded scope of the sales and service tax (SST).

Inflation is also expected to be influenced by potential global price pressures, particularly as a result of policies under Donald Trump.

"Considering these factors, along with sustained domestic growth and the US Federal Reserve's recent hawkish pivot, we continue to expect Bank Negara Malaysia to keep the overnight policy rate at 3.0 per cent in 2025, adopting a wait-and-see stance," it said in a note.

Headline inflation edged down to 1.8 per cent year-on-year (YoY) in November, below the consensus estimate of 2.1 per cent YoY.

The Consumer Price Index (CPI) stood at 133.3 points, according to the Department of Statistics Malaysia (DOSM).

According to DOSM, the rise was largely attributed to higher costs in food and beverages standing at 2.6 per cent and housing, water, electricity, gas and other fuels at 3.2 per cent.

Food inflation was particularly pronounced, driven by a 4.8 per cent rise in chicken prices, with the average price of standard chicken reaching RM10.41 per kilogram, up from RM9.96 in November 2023.

However, inflation in transport slowed to 0.4 per cent, while information and communication recorded a notable decline of 3.9 per cent, reflecting lower prices for services in this category.

https://www.nst.com.my/business/economy/2024/12/1151573/hlib-research-inflation-may-rise-2025