OCBC Lowers Malaysia's 2025 Inflation Forecast To 1.5%
According to OCBC Bank Malaysia's Senior ASEAN Economist, Lavanya Venkateswaran, the primary drivers behind the subdued June inflation print were a deceleration in the transportation subcomponent (0.3% YoY from 0.7% in May), along with ongoing deflation in communication services (-5.4% YoY from -5.2%) and a moderation in furnishing prices (0.1% from 0.2%). Inflation in key categories such as food (2.1%), utilities (1.7%), education services (2.2%), and insurance (1.5%) remained unchanged from May.
In light of these developments, OCBC has revised its 2025 headline Consumer Price Index (CPI) forecast downwards to 1.5% from a previous estimate of 2.0%. This adjustment is largely influenced by the lower-than-expected inflation rate of 1.4% in the first half of 2025 and 'reduced prospects of RON95 rationalisation,' as the government appears to require a more detailed review of the subsidy mechanism. OCBC had previously factored in a 20-25% increase in RON95 prices from October 2025, an expectation that now seems less likely in the immediate future.
Given the view that Malaysia's Gross Domestic Product (GDP) growth is expected to slow in the second half of 2025 to 3.5% YoY from 4.4% in the first half of 2024, coupled with persistently low inflation, OCBC sees room for further monetary policy easing.
'We have pencilled in another 25 basis points rate cut from Bank Negara Malaysia (BNM) for the remainder of the year,' stated Venkateswaran.
Bank Negara Malaysia's Monetary Policy Committee (MPC) last met on July 9, 2025, where it decided to cut the Overnight Policy Rate (OPR) by 25 basis points to 2.75%. The next MPC meetings are scheduled for September 4, 2025, and November 6, 2025, providing potential windows for further policy adjustments. Related
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Focus Malaysia
13 hours ago
- Focus Malaysia
Anwar puzzled by calls to extend RON95 price cut to foreigners
PRIME Minister Datuk Seri Anwar Ibrahim has defended the government's decision to exclude foreigners from enjoying the subsidised RON95 petrol price of RM1.99 per litre, stressing that the subsidy is meant exclusively for Malaysians. Speaking at the launch of the National Month and Fly the Jalur Gemilang 2025 campaign, Anwar said, 'This is not discrimination, but the policy of a sovereign nation prioritising its people.' Foreigners and tourists, including those from Singapore, will pay the market rate of RM2.50 to RM2.60 per litre. He also questioned opposition claims that foreigners contribute to the national economy, asking, 'In what part of the world are foreigners treated the same as citizens?' Anwar added that the targeted subsidy approach is expected to reduce government spending that was previously extended to non-taxpaying foreign nationals. Despite criticism over the six-sen reduction, he emphasised it was a carefully considered move aligned with the MADANI government's commitment to social justice. —July 27, 2025 Main image: Sinar Daily
Barnama
13 hours ago
- Barnama
RON95 Price Cut A Boon For Sabahans
KOTA KINABALU, July 27 (Bernama) -- The government's decision to lower the price of subsidised RON95 petrol is expected to significantly boost economic growth and improve the standard of living for the people in Sabah. Civil servant Ampuan Suhaini Ampuan Kassim, 51, said the government's proactive move was a bold decision that can help sustain economic stability for the people. 'The previous hike in RON95 prices had affected the cost of goods and services, even those under government control,' she told Bernama. Ampuan Suhaini, who frequently commutes between Papar and Kota Kinabalu, said the price reduction is especially beneficial to rural residents who rely heavily on private transport. She added that the announcement reflects the Prime Minister's commitment to fulfilling his promise of enhancing the people's well-being. Prime Minister Datuk Seri Anwar Ibrahim today clarified that the subsidised RON95 petrol price of RM1.99 per litre, announced last Wednesday (July 23), applies only to Malaysian citizens, while foreigners will be charged market rates. He said this is to ensure the government's subsidy benefits only citizens, in line with the MADANI Government's approach, which emphasises social justice. Meanwhile, army retiree Armendas Keratas, 56, said although the six-sen reduction in RON95 price may seem small, it holds great significance for Sabahans. 'Even though some voiced out disappointment and called for 'Anwar to step down', the reality is, the petrol price will go down and this decision truly matters to the people,' he said.
New Straits Times
16 hours ago
- New Straits Times
Muar hosts national month launch, honouring Johor's patriotic contributions
MUAR: Johor's Bandar Maharani being chosen as the venue for this year's National Month and Jalur Gemilang launch is a strong recognition of the state's historical, patriotic, and economic contributions to the nation. Menteri Besar Datuk Onn Hafiz Ghazi described the launch in Muar as "no coincidence," noting that the district was the cradle of the country's independence movement. "This is not merely a launch venue. It is a symbol of honour, a tribute to Johor's deep-rooted spirit of patriotism and nationhood," Onn Hafiz said in his speech today. Held at Dataran Tanjung Emas, the event was launched by Prime Minister Datuk Seri Anwar Ibrahim. Also present was Communications Minister Datuk Fahmi Fadzil. Onn Hafiz expressed gratitude to the prime minister and federal administration for choosing Johor, saying the decision reflected mutual trust and a renewed synergy between federal and state governments. In his speech, he welcomed key federal announcements, including the RM100 SARA aid for 22 million adults, the new RM1,700 minimum wage, reduced RON95 petrol prices, and the expansion of Rahmah Madani sales, calling them concrete steps towards easing the people's burden and realising true independence. "Real freedom isn't just about being rid of colonisers. It means escaping poverty, coping with living costs, and living with dignity in our own land," he said, adding that the theme Malaysia Madani: Rakyat Disantuni (Protecting the People's Welfare) resonates strongly with Johoreans. Citing recent data, Onn Hafiz revealed that Johor secured RM30.1 billion in approved investments in Q1 2025 alone, a significant jump from the previous year. "The state's gross domestic product grew by 6.4 per cent last year, surpassing the national average. "These are not just numbers. They reflect Johor's status as not only the economic driver of the south, but one of the key engines of national growth," he said. He expressed confidence that continued collaboration with the federal government would further strengthen Johor's path towards becoming a progressive and compassionate state. Calling for a renewed spirit of national unity, Onn Hafiz urged Malaysians not to let the Jalur Gemilang remain a mere ornament. "Let it live in our hearts as a symbol of struggle, freedom, and dignity. And fly the Johor flag with pride, because this is where our strength began," he said. He reminded the people that the current generation bears the responsibility to preserve and uplift the legacy left by those who fought for independence. "Let Johor not only be a state that develops, but one that unites. Let it not just be advanced, but honourable."
