Kuala lumpur: Apex Securities Bhd has maintained its projection for inflation to rise modestly to two per cent in 2026, the upper end of the official forecast range of 1.3-2.0 per cent. In a research note today, Apex Securities highlighted that the downside bias to its 2026 forecast is influenced by several policy measures, including the Sales and Services Tax (SST) expansion, Budi95 implementation, electricity and water tariff reforms, minimum wage adjustments, and staggered medical insurance premium hikes.

According to BERNAMA News Agency, Apex Securities noted that inflation averaged +1.4 per cent year-on-year (y-o-y) in the first 10 months of this year, aligning with their full-year forecast. The firm also observed that the impact of the SST expansion has been muted so far, while the lower RON95 price under Budi95 and the expectation of a firmer ringgit against the US dollar should provide additional offsets.

Apex Securities expressed that the risks to their 2026 inflation forecast of +2.0 per cent y-o-y are slightly skewed to the downside. They also mentioned that with steady growth and contained inflation, Bank Negara Malaysia (BNM) is expected to maintain the Overnight Policy Rate at 2.75 per cent through 2026, unless faced with renewed external trade shocks.

The firm further stated that the benign inflation environment, the US Federal Reserve’s easing bias, and an anticipated stronger ringgit offer policy room for BNM to ease the rate if the growth outlook weakens amid a volatile external backdrop.

Meanwhile, CIMB Investment Bank Bhd observed that ringgit sovereign bonds traded within a narrow range despite softer-than-expected headline inflation, as core inflation rose to a two-year high. CIMB also noted that BNM announced the reopening of the 20-year Government Investment Issue (GII) 05/45 on Nov 20 with a smaller-than-expected RM3 billion issuance.