BMI Sees BNM Holding OPR At 2.75 Pct Through 2027

KUALA LUMPUR, Nov 4 (Bernama) -- BMI expects Bank Negara Malaysia (BNM) to maintain its overnight policy rate (OPR) at 2.75 per cent tomorrow and through 2027, citing resilient economic growth and a manageable inflation outlook.

BMI, a unit of Fitch Solutions, said headline inflation was expected to remain comfortably within BNM’s target range of 1.5 to 2.5 per cent in the near term.

“The consumer spending outlook also remains broadly positive, supported by a resilient labour market, with unemployment at 3.1 per cent, and inflation below BNM’s upper target of 2.5 per cent.

"While stronger petroleum revenues and Petronas dividends will support Malaysia’s fiscal position, households will face pressure from tighter fiscal policy and rising living costs," it said in a statement.

However, higher food and fuel prices remain key risks, with food and non-alcoholic beverages accounting for 25.5 per cent of household spending.

BMI forecasts real household spending growth of 4.08 per cent year-on-year (y-o-y) in 2026 and 4.07 per cent in 2027, taking spending to 31.2 per cent and 36.6 per cent above pre-pandemic levels, respectively.

It added that elevated household debt and debt-servicing costs would further constrain spending growth.

"Nevertheless, we expect BNM to maintain its overnight policy rate at 2.75 per cent through 2027," it said.

-- BERNAMA