Malaysia’s CPI Inflation Rises Slightly to 1.6% in December 2025, Remains Mild Overall

Malaysia’s headline Consumer Price Index (CPI) inflation edged up to +1.6% year-on-year in December 2025, from +1.4% in November, slightly exceeding both private forecasts of +1.5% and market consensus of +1.4%. The reading marks a continued gradual uptrend from the low of +1.1% recorded in June 2025.Inflation increased in both urban and rural areas: urban CPI rose to +1.5% yoy (from +1.4% in October), while rural inflation strengthened to +1.0% yoy (from +0.9%).

CPI Inflation Rises Slightly

Despite the modest pickup, overall price pressures remain contained.Analysts maintain their 2026 full-year inflation forecast at +1.8% (2025 average: +1.4%), citing limited upside risks from the recent reduction in subsidised RON95 petrol to RM1.99 per litre, which offsets potential pressures from expanded Sales and Service Tax (SST) scope or other policy changes.The outlook supports expectations that Bank Negara Malaysia will keep the Overnight Policy Rate (OPR) unchanged at 2.75% in 2026, balancing steady growth and controlled inflation risks.

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