MIDF Amanah Trims Inflation Forecast Down To 2.0% In 2024

MIDF Amanah Investment Bank Bhd has revised its 2024 inflation forecast downward to 2% from 2.3% previously, taking into account the absence of subsidy rationalisation this year.

In its monthly economic review released, the research house expects inflation to remain stable in the coming months, as the targeted RON95 subsidy will only be rolled out in mid-2025.

“For the third quarter of 2024 (3Q2024), headline inflation remained unchanged at 1.9% year-on-year (y-o-y) (2Q2024: +1.9% y-o-y), with the one-off diesel price hike exerting limited upside pressure on the overall consumer price index (CPI).

“Overall, CPI inflation averaged lower at 1.8% y-o-y in the first nine months of 2024, as easing food inflation at 1.8% y-o-y offset higher inflation from non-food components, which also stood at 1.8% y-o-y,” it said.

Hence, MIDF anticipates that the overnight policy rate (OPR) will remain at 3% this year, given stable inflation and no significant demand pressures.

The research house also expects this rate to continue into next year, considering it normal for Malaysia and supportive of sustainable economic growth.

Earlier, the Department of Statistics Malaysia announced that the country's inflation rate for September 2024 had eased to 1.8%, down from 1.9% in August, with the index points at 133.2 against 130.8 in the same month last year.