Kuala Lumpur: Malaysia’s headline inflation is predicted to increase in the latter part of the year, following its lowest rate in over four years in March.

According to BERNAMA News Agency, Moody’s Analytics anticipates that both the transport and housing, and utilities categories might experience heightened inflationary pressures as the government reduces fuel subsidies and raises electricity tariffs.

Moody’s Analytics highlighted that unpredictable weather conditions remain a significant factor that could sustain food inflation. Malaysia’s consumer price index (CPI) decelerated to 1.4 percent year-on-year in March, down from 1.5 percent in February, and fell short of the firm’s projected 1.6 percent rise. The deceleration was primarily due to easing inflation in housing and utilities, which slowed for the third consecutive month, attributed to reduced cost pressures on water supply and services.

Transport inflation, the third most significant category in the CPI basket, remained stable despite an increase in average diesel prices compared to the previous year. Meanwhile, Moody’s Analytics also projected Singapore’s full-year inflation for 2025 to be at 0.9 percent, with March’s headline inflation stable at 0.9 percent year-on-year, slightly below the forecast of one percent.

Price pressures in Singapore softened in major areas like accommodation and transportation, though a minor rise in food prices prevented a decrease in headline inflation. Falling global commodity prices, especially Brent crude oil, are anticipated to keep both headline and core inflation low throughout 2025. The price of Brent crude recently fell below US$65 per barrel, and Moody’s expects it to remain low due to declining global demand and improved supply conditions.

The firm further noted that with core inflation comfortably within the Monetary Authority of Singapore’s target of below two percent, the central bank is expected to maintain its easing monetary policy settings in its July meeting.