Kuala lumpur: Malaysia's headline and core inflation in 2025 averaged at 1.4 per cent and two per cent, respectively, compared with 1.8 per cent in 2024, said Bank Negara Malaysia (BNM).

According to BERNAMA News Agency, BNM governor Datuk Seri Abdul Rasheed Ghaffour stated that in the fourth quarter of 2025, headline inflation remained stable at 1.3 per cent, while core inflation increased to 2.3 per cent. This rise was mainly driven by faster price increases in certain core items, such as jewellery and watches, as well as base effects from mobile communication services inflation.

The increase in inflation was largely offset by lower prices for selected administered items, particularly electricity and petrol. These reductions were attributed to larger discounts related to electricity generation costs during the quarter and the targeted RON95 fuel subsidy that began in October 2025.

Abdul Rasheed noted that inflation pervasiveness, measured by the share of consumer price index items registering monthly price increases, declined to 39.6 per cent during the fourth quarter, remaining below the historical average for this period.

Looking ahead, Abdul Rasheed mentioned that headline inflation is expected to remain moderate in 2026 due to continued easing in global cost conditions. He highlighted that the modest commodity price outlook would help contain cost pressures on inflation.

Core inflation is anticipated to remain broadly stable and close to its long-term average in 2026, reflecting continued economic expansion and the absence of excessive demand pressures. The domestic policy reforms implemented in 2025, such as the Sales and Service Tax expansion and targeted RON95 subsidy rationalisation, are projected to have only modest effects on inflation in 2026.