MBSB Investment Bank Keeps Malaysia's 2026 Inflation Outlook at 2% Amid Price Pressures

MBSB Investment Bank Bhd issued a note maintaining its forecast that Malaysia's headline inflation will climb to 2.0% in 2026, following an estimate of 1.4% for 2025. The outlook reflects a still-contained inflation picture year-to-date, yet acknowledges upside risks from elevated producer prices, fluctuating global energy costs, ongoing supply-chain disruptions, and higher fuel and fertilizer prices that may spill over to consumer prices.

The bank highlighted that existing government price controls and targeted fuel subsidies should partially offset these pressures, and that Bank Negara Malaysia's balanced monetary policy is expected to support price stability without overly restraining domestic demand. Nonetheless, the analysis cautioned that fresh geopolitical disturbances could push inflation higher by affecting international trade and global commodity flows. The Department of Statistics Malaysia recently reported August CPI growth of 1.9%, driven mainly by transport costs and modest increases in personal care and miscellaneous goods.