Kuala lumpur: The 1.6 percent increase in Malaysia's consumer price index (CPI) for January 2026 is regarded as manageable, according to an economist. The components that experienced significant rises constitute only a small portion of the index, observed Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid. He noted that core CPI inflation, which excludes the effects of subsidies and price-controlled items, maintained a steady rate of 2.3 percent for the second consecutive month. Despite this stability, he warned that the cost-of-living issue should not be underestimated.

According to BERNAMA News Agency, Dr Afzanizam stated, "It indicates that price levels remain elevated, which can have a disproportionate impact on Malaysians across income levels. High-income individuals may not feel much of an effect, but middle- and low-income groups could see their purchasing power reduced."

Meanwhile, Sunway University economics professor Dr Yeah Kim Leng remarked that both headline CPI at 1.6 percent and core CPI at 2.3 percent year-on-year in January 2026 were consistent with the previous month's rates, implying that monthly inflation remained low at the start of the year and between two festive periods. He added, "However, core inflation, which excludes volatile fuel and food prices, remained above the five-year average of 2.1 percent. Its positive month-on-month increase suggests price momentum is picking up."

Earlier, the Department of Statistics Malaysia reported that the CPI rose by 1.6 percent in January 2026, with the index climbing to 135.7 from 133.6 in the same month last year. The rise was driven by four groups, with personal care, social protection, and miscellaneous goods and services leading the increase at 6.6 percent year-on-year, compared to 5.7 percent in December 2025.

Commenting on the stronger ringgit, Mohd Afzanizam mentioned that it would likely have a positive impact on the Malaysian economy, but the effect on household purchasing power amid rising inflation depends on how swiftly businesses transfer the benefits to consumers. He explained, "If the market becomes more competitive, the businesses would want to adjust their prices lower. In that sense, it will take a while before it can really pass the benefits of ringgit appreciation to the consumers."

He also noted that improvements in purchasing power from a stronger ringgit are already evident among Malaysians who travel abroad and businesses that procure raw materials from overseas. "In that sense, the positive impact of currency appreciation varies; some may feel it almost immediately, while for others, it will take some time," Dr Afzanizam added.