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THE country’s inflation rate rose modestly in August, led by higher insurance premiums, personal care costs and accommodation services, according to official figures released by the Department of Statistics Malaysia (DOSM) on Tuesday.
The Consumer Price Index (CPI) increased by 1.3% compared to August 2024, slightly above July’s 1.2% annual gain and in line with analysts’ expectations.
Insurance and financial services saw the sharpest increase, with inflation accelerating to 5.6% from 5.5% in July.
This was driven largely by a 14.7% surge in hospital benefit insurance premiums, alongside rising motor vehicle insurance charges and steady premiums for motorcycle coverage.
Inflation for restaurants and accommodation services also picked up, climbing to 3.5% in August from 3.1% a month earlier, with accommodation costs cited as the primary driver.
Food and beverage prices, which constitute nearly 30% of the CPI basket, rose by 2% in August, marginally higher than the 1.9% recorded in July.
However, inflation for food consumed at home eased to just 0.1%, with price declines seen in vegetables, dairy, eggs and meat. Dining out remained more expensive, with food-away-from-home inflation holding steady at 4.3%.
Costs for housing, utilities, gas and fuels moderated slightly, with inflation falling to 1.2% from 1.3% due to a higher electricity rebate under the revised Imbalance Cost Pass-Through mechanism.
Meanwhile, core inflation — which strips out volatile items such as fuel and fresh food — edged up to 1.9% from 1.8% in July, indicating continued underlying price pressures in services and discretionary spending categories.
Despite the uptick, headline inflation has remained below the 2% mark for 25 consecutive months since July 2023. Bank Negara Malaysia (BNM) has projected full-year inflation to remain within the 2.0% to 3.5% range, supported by relatively stable global commodity prices and domestic subsidies. - September 23, 2025