Malaysia’s inflation hits lowest rate in over four years, at 1.2% in May 2025

Food, housing, and education prices rose at a slower pace in May 2025, as declining global oil prices continued to ease inflation across the country.

According to the Department of Statistics Malaysia (DOSM), the Consumer Price Index (CPI) in Malaysia stood at 134.4 in May, an increase from 132.8 in the same month last year. This marks the country’s slowest inflation rate in 51 months, aligning with a broader regional trend seen across other open economies such as the Eurozone (1.9%), Republic of Korea (1.9%), Indonesia (1.6%) and the Philippines (1.3%). The slowdown is largely attributed to declining global oil prices. This decline was also reflected through Malaysia’s Producer Price Index (PPI) for local production contracted by 3.4% in April.

Food and beverages price growth slows, but dining out costs climb

Food and beverages group inflation remained a contributor to overall price pressures but rose more modestly at 2.1% in May. Notably, prices for food at home held steady with no increase month-on-month, following a 0.5% rise in April. However, the cost of eating out increased, with the “food away from home” subgroup rising by 4.4%, slightly higher than April’s 4.3%.

Slower increases across key sectors

Several expenditure groups registered a slower increase in May, including:

• Personal care, social protection, and miscellaneous goods & services (3.7%)
• Education (2.2%)
• Housing, water, electricity, gas & other fuels (1.7%)
• Recreation, sport & culture (0.9%)
• Alcoholic beverages & tobacco (0.6%)

Meanwhile, price movements in transport (0.7%) and insurance & financial services (1.5%) remained unchanged compared to the previous month.

State-level inflation: Johor leads, Kelantan sees lowest increase

At the state level, 11 states recorded inflation rates below the national average of 1.2%, with Kelantan recording the smallest increase at 0.3%. On the other hand, Johor saw the highest inflation rate at 1.8%, followed by Negeri Sembilan (1.6%), Selangor (1.5%), Melaka (1.5%), and Kuala Lumpur (1.4%). All states, however, recorded some degree of increase in food and beverage prices.

Monthly price change stays moderate

On a month-to-month basis, headline inflation inched up by 0.1% in May as compared to April. This was driven by slight increases in:

• Restaurant & accommodation services (0.4%)
• Housing, water, electricity, gas & other fuels (0.3%)
• Health and education (0.2% each)
• Food & beverages, alcoholic beverages & tobacco, and household equipment & maintenance (0.1% each)

Core inflation decreased to 1.8%

Core inflation eased to 1.8% in May 2025, a decrease from 2.0% in April. The slower rate was supported by moderated increases in several key groups, including personal care, social protection and miscellaneous goods and services (3.7%), education (2.2%), transport (2.1%), and housing, water, electricity, gas and other fuels (2.1%).

Lead image / DOSM