Kuala Lumpur: Bank Negara Malaysia (BNM) will continue to adopt a data-driven approach in evaluating the impact of economic developments on inflation and growth, said Deputy Governor Datuk Marzunisham Omar. While several central banks have recently started cutting policy interest rates, BNM’s monetary policy remains guided by Malaysia’s specific economic condition.

According to BERNAMA News Agency, Marzunisham emphasized that the central bank is aware of other central banks’ actions, but the primary focus remains on the domestic economic outlook. He made these remarks at the 2025 BNM Governor’s Address on the Malaysian Economy and Panel Discussion, organized by the Malaysian Economic Association.

Marzunisham highlighted that supply shocks, which can arise from both external and domestic factors, may have a deflationary impact on growth. Examples include disruptions in global supply chains or policy changes within Malaysia, such as adjustments to fuel prices or subsidies.

He explained that managing these shocks requires a careful balance in monetary policy, factoring in price adjustments and their effects on economic growth. Conventional wisdom advises central banks to overlook supply shocks, especially when they are temporary and do not impact long-term inflation expectations.

The Deputy Governor noted that since 2019, Malaysia’s nominal wage growth has lagged behind rising prices, worsening cost-of-living challenges. For instance, the nominal wage per worker only increased by seven percent cumulatively, while overall prices rose by 9.3 percent, with food prices rising by 17.4 percent.

Marzunisham added that although the country has managed to lower the inflation rate, price levels remain elevated. Addressing this concern involves not only managing inflation but also increasing wages, particularly for lower-income households burdened by rising costs of basic necessities like food and housing.

To tackle these challenges, he suggested that Malaysia should explore ways to boost incomes, such as by attracting more investments to create high-skilled and high-paying jobs.