KUALA LUMPUR: Malaysia's inflation remained at 1.8 per cent in March with the index points recorded at 132.2 against 129.9 in March last year, according to the Department of Statistics Malaysia (DoSM).
The increase in inflation last month was driven by rises in housing, water, electricity, gas and other fuels (three per cent), restaurant and accommodation services (three per cent), personal care, social protection and miscellaneous goods and services (2.6 per cent) and transport (1.3 per cent).
However, the increase was offset by slower increases in other main groups, namely health (2.1 per cent), food and beverages (1.7 per cent), as well as recreation, sport and culture (1.5 per cent).
DoSM said the increase of three per cent in for housing, water, electricity, gas and other fuels was contributed by the expenditure class of water supply which increased to 31.4 per cent in March 2024.
"Kedah has increased the water tariff rates for domestic category users starting in March 2024 as compared to other states that have implemented the new tariff rates in February 2024," it added.
Meanwhile, DoSM said the food and beverages group recorded a slower increase of 1.7 per cent in March 2024, with the main subgroup of food at home increased to 0.3 per cent.
The main subgroup of food away from home increased 3.5 per cent, the same rate as registered in February 2024.
Overall, DoSM said the monthly inflation recorded a marginal increase of 0.1 per cent as compared to 0.5 per cent recorded in February 2024.
Meanwhile, core inflation increased slower at 1.7 per cent as compared to 1.8 per cent in February 2024.
For inflation at the state level, DoSM said most of the states recorded increases below the national inflation level of 1.8 per cent.
However, it noted that five states recorded increases above the national inflation level namely Pulau Pinang (three per cent), Sarawak (2.9 per cent), Pahang (2.1 per cent), Selangor (2.1 per cent), and Perlis (1.9 per cent).
In comparison to inflation in other selected countries, inflation in Malaysia (1.8 per cent) was lower than inflation in Vietnam (four per cent), the Philippines (3.7 per cent), United States of America (3.5 per cent), South Korea (3.1 per cent) and Indonesia (3.1 per cent).
However, the rate was higher than China (0.1 per cent) and Thailand (-0.5 per cent).
In a note today, OCBC Global Markets Research senior Asean economist Lavanya Venkateswaran said the headline inflation came below the firm's baseline, suggesting that inflationary pressures remain benign.
She added that the main risk to inflation in the coming months will be the timing and mechanism of the government's fuel subsidy rationalisation policies.
Economy Minister Rafizi Ramli noted that the government will make an announcement in the coming weeks.
"We will assess the implications of the government's impending announcement.
"For now, we maintain our 2024 average CPI inflation forecast of 2.5 per cent.
"In terms of monetary policy implications, we maintain our forecast for Bank Negara Malaysa to keep its policy rate unchanged at three per cent for the rest of this year," she noted.