Key Economists’ Consensus Indicate that Malaysia is Not Headed for Deflation despite Low CPI

Key economists in Malaysia have stated that Malaysia will not experience deflation, despite the plummeting Consumer Price Index (CPI) which declined a further 2.9% in April 2020 year-over-year (YoY), its biggest drop since 2010.

According to Dr Mohd Afzanizam Abdul Rashid, Chief Economist of Bank Islam Malaysia (BIM), the country was not heading towards deflation since the main driver behind the decline in the headline CPI was fuel prices and electricity charges, with both sub-indices declining by 38.2% and 33.3%, YoY respectively, in April 2020. Dr Afzanizam stated that the core CPI, which excludes unpredictable items such as fresh food and administered prices, had actually grown by 1.3% over the past three months and th...