1.6 Pct Increase In Malaysia’s January CPI Deemed Manageable -- Economist
By Fatin Umairah Abdul Hamid
KUALA LUMPUR, Feb 19 (Bernama) -- The 1.6 per cent increase in Malaysia’s consumer price index (CPI) for January 2026 is considered manageable, as the components that saw significant rises account for only a small share of the index, said an economist.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that core CPI inflation, which excludes the effects of subsidies and price-controlled items, increased at a sustained rate of 2.3 per cent for the second consecutive month.
Despite this, he cautioned that the cost-of-living issue should not be downplayed.
“It indicates that price levels remain elevated, which can have a disproportionate impact on Malaysians across income levels.
“High-income individuals may not feel much of an effect, but middle- and low-income groups could see their purchasing power reduced,” he told Bernama.
Meanwhile, Sunway University economics professor Dr Yeah Kim Leng said that both headline CPI at 1.6 per cent and core CPI at 2.3 per cent year-on-year in January 2026 were similar to the previous month’s rates, suggesting that monthly inflation remained low at the start of the year and between two festive periods.
“However, core inflation, which excludes volatile fuel and food prices, remained above the five-year average of 2.1 per cent.
“Its positive month-on-month increase suggests price momentum is picking up,” he said.
Earlier, the Department of Statistics Malaysia reported that the CPI rose 1.6 per cent in January 2026, with the index increasing to 135.7 from 133.6 in the same month last year.
The rise was driven by four groups, led by personal care, social protection, and miscellaneous goods and services, which increased 6.6 per cent year-on-year, compared with 5.7 per cent in December 2025.
Commenting on the stronger ringgit, Mohd Afzanizam said it would likely have a positive impact on the Malaysian economy, but the effect on household purchasing power amid rising inflation depends on how quickly businesses pass the benefits to consumers.
“If the market becomes more competitive, the businesses would want to adjust their prices lower.
“In that sense, it will take a while before it can really pass the benefits of ringgit appreciation to the consumers,” he added.
He said improvements in purchasing power from a stronger ringgit are already visible among Malaysians who travel abroad and businesses that procure raw materials from overseas.
“In that sense, the positive impact of currency appreciation varies; some may feel it almost immediately, while for others, it will take some time,” Mohd Afzanizam said.
-- BERNAMA