FX.co ★ Malaysia Inflation Highest in Nearly 2 Years

Malaysia’s annual inflation rate increased to 2.0% in May 2026 from 1.9% in April, coming in slightly below market expectations of 2.1%, but still reaching its highest level since July 2024. The acceleration was mainly driven by stronger price pressures in several categories, including food and beverages (1.4% vs 1.2% in April), housing and utilities (1.2% vs 1.1%), information and communication (2.1% vs 2.0%), and recreation, sport and culture (1.1% vs 0.9%).

By contrast, inflation in the transport category eased to 3.8% from 4.1%. This moderation was largely due to lower prices for vehicle purchases and transport services of goods, which remained in deflation at -0.2% and -1.3%, respectively. These declines partly offset higher prices for public transport services (6.8%) and the operation of personal transport equipment (4.2%).

Core inflation, as measured by the CPI excluding fuel, inched up to 1.8% in May from 1.7% in April. On a month-on-month basis, consumer prices rose 0.1%, the smallest increase in four months and a clear moderation from the 0.4% rise recorded in April.