Malaysia’s headline inflation rose slightly to 1.4% in November 2025, up from 1.3% in the previous month, according to Bank Negara Malaysia (BNM).

Headline inflation measures the overall change in prices for everyday goods and services faced by households. In BNM’s Monthly Highlights report for November 2025, the central bank said the increase was partly driven by higher cigarette prices following the excise duty increase announced in Budget 2026, as well as higher food-at-home prices, particularly fresh meat and fish.

What This Means For Households

For households, a higher headline inflation rate means some daily expenses may continue to rise, especially food-related items. While the increase remains moderate, it may affect monthly budgets, particularly for families that spend a larger share of their income on groceries.

Tracking changes in food prices and reviewing household spending can help manage cost pressures during periods of rising inflation.

Core Inflation Remains Unchanged

BNM said core inflation, which excludes items with more volatile prices such as food and fuel, remained unchanged at 2.2% in November.

The central bank said underlying price pressures stayed steady. Higher inflation in mobile communication services and motor vehicles was offset by lower inflation in jewellery, watches, and audio-visual services.

Manufacturing Output Records Faster Growth

On the production side, manufacturing activity strengthened further. The Manufacturing Industrial Production Index grew by 6.5% in October, compared with 5% in September.

Export-oriented manufacturing clusters recorded stronger growth of 7.2% in October, up from 4.8% in September. This was driven mainly by increased output in electrical and electronics, as well as machinery and equipment.

Domestic-Oriented Manufacturing Grows At Slower Pace

Domestic-oriented manufacturing clusters grew by 4.9% in October, easing from 5.3% in the previous month.

BNM said growth in food and beverage production and pharmaceuticals continued to support the sector. However, this was partly offset by a contraction in motor vehicle production.

Credit Growth Moderates Slightly

Credit to the private non-financial sector grew by 5.5% in November, slightly lower than the 5.7% recorded in October. The growth was supported by steady expansion in outstanding loans.

Business loan growth moderated to 5% following slower borrowing among small and medium enterprises. In contrast, loan growth among non-SMEs increased, particularly for investment-related purposes.

Household loan growth remained stable at 5.7%, supported by sustained loan growth across most loan purposes.

What Borrowers Should Take Note Of

Stable household loan growth suggests borrowing conditions remain steady. However, with inflation affecting daily costs, households may want to review their debt commitments and ensure loan repayments remain manageable alongside other living expenses.

Banking System Remains Stable

BNM said the banking system continued to show strong financial resilience. Banks’ liquid asset buffers remained adequate, with the aggregate liquidity coverage ratio standing at 145.6% in October.

Asset quality also remained sound. The gross impaired loans ratio stayed stable at 1.4%, while the net impaired loans ratio edged up slightly to 1%, mainly due to lower provisions.

Ringgit Appreciates Amid Global Policy Expectations

BNM said domestic financial markets in November were influenced by changing expectations surrounding the US Federal Reserve’s future monetary policy direction.

During the month, the ringgit appreciated by 1.5% against the US dollar. Meanwhile, the FBM KLCI declined by 0.3%, amid net foreign equity outflows.

Overall, the central bank said Malaysia’s economic and financial conditions remained stable, supported by steady domestic demand, improving manufacturing activity, and a resilient banking system.

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