Malaysia’s inflation rate rose slightly to 1.3% year-on-year in August 2025, compared to 1.2% in July [PDF], according to the Department of Statistics Malaysia (DOSM). The Consumer Price Index (CPI) stood at 134.9 points in August, up from 133.2 a year earlier.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said nearly 60% of items tracked recorded price increases. “Out of 573 items, 342 items showed increases in August, although most recorded rises of less than 10%,” he noted.

Food And Dining Costs Drive Inflation

The food and beverages group, which carries the largest weight in the CPI, increased by 2.0% in August. Prices for meals outside the home remained high, with a year-on-year rise of 4.3%, similar to July. Popular items such as satay, cooked beef, and rice with side dishes saw notable increases.

At the same time, the cost of food at home eased slightly to -0.1%, supported by lower prices for vegetables, dairy products, and fruits. For example, big onions were down 24.1%, tomatoes dropped 12.9%, and lady’s fingers fell 12.2% compared to a year ago.

Utilities Reflect Mixed Trends

Housing, water, electricity, gas, and other fuels rose by 1.2% in August, compared to 1.3% in July. The decline was mainly due to a rebate in the Automatic Fuel Adjustment (AFA) mechanism, which reduced the average electricity tariff for high-usage households.

Meanwhile, five states including Johor, Kedah, Melaka, Pahang, and Terengganu implemented new water tariff adjustments effective 1 August 2025, with several others following in September.

Transport Costs Eased, Insurance Prices Rose

Inflation in the transport group slowed to 0.2% in August, down from 0.4% in July. Average prices for RON97 petrol and diesel fell compared to a year earlier, helping to limit transport-related inflation.

In contrast, insurance and financial services recorded one of the largest increases, rising 5.6%, driven by higher motor vehicle insurance premiums.

Inflation Differs Across States

At the state level, Johor recorded the highest inflation at 2.0%, while Kelantan posted the lowest at 0.1%. Food inflation was highest in Negeri Sembilan and Labuan, both at 3.0%.

Regionally, Malaysia’s inflation rate of 1.3% was lower than Indonesia (2.3%) and Vietnam (3.2%), but higher than Thailand (-0.8%) and China (-0.4%).

Inflation Still Within Government Forecast

For the first eight months of 2025, Malaysia’s inflation averaged 1.3%, in line with the government’s full-year forecast of around 1.5%.

Uzir said DOSM will continue to monitor food-related inflation closely, as it remains the main factor shaping household expenses.

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