Inflation Rate To Trend Between 2.0 Pct And 2.3 Pct Yoy For 2024 - Analysts

KUALA LUMPUR, Sept 23 (Bernama) -- Analysts expect headline inflation to trend between 2.0 per cent and 2.3 per cent year-on-year (yoy) for the rest of 2024.

RHB Invesment Bank Bhd and MIDF Amanah Investment Bank Bhd have maintained their inflation forecast this year depending on the policy changes.

In a note today, RHB IB said it anticipates that headline inflation will stabilise this year, assuming adjustments to RON95 fuel prices are delayed until December 2024 at the earliest.

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“We maintain our 2024 headline inflation projection at 2.1 per cent, with core inflation to average 2.0 per cent.

“Inflationary pressures remain manageable after the diesel price float in Peninsular Malaysia and the services tax adjustment, leading to a 1.8 per cent yoy increase in headline inflation for the first eight months,” it said.

Looking ahead, RHB IB said the inflation trajectory will depend on the timing and extent of RON95 subsidy rationalisation, potential demand increases from partial pension fund withdrawals and fluctuations in global commodity and food prices.

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In a separate note, MIDF said inflation will moderate to 2.3 per cent in 2024 (2023: 2.5 per cent), given the relatively low rise in consumer price index (CPI) in eight month of 2024.

“While we still expect the targeted subsidy for RON95 to be implemented in 4Q 2024, the stable inflation thus far suggests that the spillover inflationary pressures from policy changes have been limited.

“On the other hand, if the government decides to delay the subsidy rationalisation for RON95, the full-year CPI inflation could be -0.2 percentage point lower than our existing forecast,” it said.

However, CIMB Invesment Bank Bhd said it has revised its inflation forecast for 2024 to 1.9 per cent from 2.3 per cent.

“We expect the inflation rate to stay benign in the coming months, as the ringgit appreciate and moderating global crude oil prices alleviate imported cost pressures on businesses, mitigating the impact of the lower base effect,” CIMB Investment Bank said.

-- BERNAMA