Malaysia Inflation Rate MoM: November 2025 Analysis and Macro Outlook
Key Takeaways: Malaysia’s November 2025 inflation rate MoM unexpectedly declined by -0.10%, missing the 0.20% estimate and reversing October’s 0.20% rise. This marks the first monthly deflation since December 2024. Core inflation pressures remain subdued amid easing commodity prices and cautious consumer demand. Monetary policy remains on hold, but the Bank Negara Malaysia (BNM) faces a delicate balance amid external risks and fiscal constraints. Financial markets showed muted reaction, reflecting uncertainty over near-term growth. Structural trends suggest moderate inflation volatility ahead, with geopolitical tensions and global supply chain shifts as key risk factors.
Table of Contents
Malaysia’s latest inflation rate MoM for November 2025 registered a -0.10% decline, contrasting with the 0.20% rise in October and the 12-month average of 0.12%. This data, sourced from the Sigmanomics database, signals a rare monthly deflation and highlights shifting dynamics in domestic price pressures.
Drivers this month
- Shelter costs eased, contributing -0.05 percentage points (pp) to the decline.
- Food and non-alcoholic beverages inflation slowed sharply, subtracting -0.03 pp.
- Energy prices stabilized after recent volatility, neutralizing prior upward pressure.
- Transport costs remained flat, reflecting subdued fuel price movements.
Policy pulse
The current inflation reading sits below BNM’s target range of 2.00–3.00%, reinforcing the central bank’s cautious stance. Monetary policy remains on hold, with the overnight policy rate steady at 3.25%. The deflationary signal may delay further tightening, but upside risks from imported inflation persist.
Market lens
Immediate reaction: The MYR/USD pair weakened marginally by 0.10% in the first hour post-release, reflecting market skepticism about growth momentum. Malaysian government bond yields remained stable, while equity indices showed minor losses amid global risk-off sentiment.
Examining core macroeconomic indicators alongside inflation provides context for Malaysia’s price trends. GDP growth for Q3 2025 moderated to 4.10% YoY, down from 4.50% in Q2, signaling cooling demand. Unemployment held steady at 3.30%, while wage growth slowed to 3.00% YoY, limiting upward pressure on consumer prices.
Monetary Policy & Financial Conditions
BNM’s current stance is accommodative but vigilant. The policy rate has been unchanged since July 2025, reflecting a wait-and-see approach amid external uncertainties. Credit growth decelerated to 5.20% YoY, and banking liquidity remains ample. Inflation expectations for 2026 hover near 2.50%, consistent with the central bank’s medium-term target.
Fiscal Policy & Government Budget
Fiscal policy remains moderately expansionary, with the 2025 budget deficit projected at 4.00% of GDP. Government spending on infrastructure and social programs supports domestic demand but is constrained by rising debt servicing costs. The fiscal stance is unlikely to shift materially in the near term, limiting stimulus impact on inflation.
External Shocks & Geopolitical Risks
Global commodity price volatility, particularly in oil and palm oil, continues to influence Malaysia’s inflation trajectory. Geopolitical tensions in Southeast Asia and trade uncertainties pose downside risks to growth and inflation. The recent easing in global supply chain disruptions has helped temper imported inflation pressures.
Drivers this month
- Shelter and housing costs declined by 0.05 pp, reflecting lower rental inflation.
- Food prices contributed -0.03 pp, driven by improved supply conditions.
- Energy prices remained flat, removing prior upward momentum.
Policy pulse
The deflationary print reinforces BNM’s cautious approach. Inflation remains below the 2–3% target, suggesting no immediate need for rate hikes. However, persistent external inflation risks warrant close monitoring.
Market lens
Immediate reaction: MYR/USD depreciated slightly by 0.10%, while 2-year government bond yields held steady near 3.50%. Equity markets showed minor declines, reflecting investor caution amid mixed inflation signals.
This chart highlights Malaysia’s inflation volatility, trending downward after a brief rise in October. The deflationary signal suggests easing domestic price pressures but underscores vulnerability to external shocks and demand fluctuations.
Looking ahead, Malaysia’s inflation trajectory will hinge on several factors. The base case scenario projects inflation stabilizing near 0.10–0.20% MoM in early 2026, supported by moderate demand and stable commodity prices. Bullish and bearish scenarios outline risks on either side.
Scenario Analysis
- Bullish (30% probability): Inflation rebounds to 0.30–0.40% MoM driven by stronger domestic demand and rising wages, prompting BNM to consider tightening.
- Base (50% probability): Inflation remains subdued around 0.10–0.20% MoM, with stable energy prices and moderate fiscal support.
- Bearish (20% probability): Deflationary pressures deepen to -0.10% or lower MoM due to global slowdown and weaker commodity prices, risking growth and policy easing.
Structural & Long-Run Trends
Malaysia’s inflation is increasingly influenced by structural factors such as digitalization, urbanization, and demographic shifts. These trends may moderate inflation volatility but also complicate policy calibration. Supply chain diversification and energy transition policies will be key long-term drivers.
Malaysia’s November 2025 inflation rate MoM print of -0.10% signals a pause in upward price momentum. While this eases near-term inflation concerns, risks from external shocks and fiscal constraints remain. Policymakers must balance growth support with inflation control amid evolving structural trends. Financial markets are likely to remain sensitive to inflation surprises and global developments.
Key Markets Likely to React to Inflation Rate MoM
Malaysia’s inflation data typically influences currency, bond, and equity markets, as well as commodity-linked stocks. The following symbols have shown historical sensitivity to inflation shifts, reflecting their economic or financial linkages.
- MYRUSD – The Malaysian ringgit’s exchange rate against the USD reacts to inflation-driven monetary policy expectations.
- FBMKLCI – Malaysia’s benchmark equity index, sensitive to economic growth and inflation trends.
- PCHEM – Petronas Chemicals, linked to commodity prices and inflation-driven input costs.
- BTCUSD – Bitcoin, often viewed as an inflation hedge, reacts to inflation surprises globally.
- USDMYR – The inverse of MYRUSD, also sensitive to inflation and monetary policy shifts.
Extras: Inflation Rate MoM vs. MYRUSD Since 2020
Since 2020, Malaysia’s monthly inflation rate has shown a moderate inverse correlation with the MYRUSD exchange rate. Periods of rising inflation often coincide with MYR appreciation due to expected monetary tightening, while deflationary phases align with MYR weakness. This relationship underscores the importance of inflation data in shaping currency market sentiment and capital flows.
FAQs
- What does the Malaysia Inflation Rate MoM indicate?
- The Malaysia Inflation Rate MoM measures the month-over-month change in consumer prices, reflecting short-term inflation trends and cost pressures.
- How does the inflation rate affect Malaysia’s economy?
- Inflation influences purchasing power, monetary policy decisions, and financial market performance, impacting overall economic stability and growth.
- Why is the Inflation Rate MoM important for investors?
- Investors use the Inflation Rate MoM to gauge inflation trends, anticipate central bank actions, and adjust portfolios accordingly to manage risk and returns.
Final Takeaway
Malaysia’s November 2025 deflationary inflation print highlights a cautious economic environment. Policymakers and markets must navigate external risks and structural shifts to sustain balanced growth and price stability.
The November 2025 inflation rate MoM of -0.10% contrasts with October’s 0.20% and the 12-month average of 0.12%. This marks a notable reversal from the prior month’s modest inflation, signaling a potential cooling phase in price dynamics.
Historically, Malaysia’s monthly inflation has fluctuated between -0.10% and 0.40% over the past year, with the last deflationary reading recorded in December 2024. The current print aligns with seasonal patterns but raises questions about sustained demand strength.