Malaysia’s Producer Price Index (PPI) contracted by 1.9% year-on-year in March 2025, a sharp decline from February’s 0.3% increase, marking the first drop since November 2024.
The downturn was primarily driven by a 15.0% plunge in the mining sector, particularly in natural gas and crude petroleum extraction, alongside a 1.8% decline in manufacturing, led by lower prices for computers, electronics, and refined petroleum products.
PPI Plunges
Electricity and gas supply prices fell slightly faster, while agriculture, forestry, and fishing saw slower growth at 9.9%. Water supply price growth also softened. On a monthly basis, PPI fell by 0.6%, with declines across mining, manufacturing, agriculture, and water supply. All processing stages—crude, intermediate, and finished goods—saw negative inflation.
With PPI below the Consumer Price Index (1.4% in March), consumer price pressures are expected to remain limited. However, potential inflationary risks from subsidy cuts, higher wages, and utility costs could emerge, though delays in subsidy rationalization may moderate inflation.
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