Malaysia’s inflation rate for November 2025 registered at 1.30% year-on-year (YoY), according to the latest data from the Sigmanomics database. This figure came in below the market consensus estimate of 1.50% and the previous month’s 1.50%, signaling a modest deceleration in price pressures. The inflation trajectory has softened steadily since a peak of 1.80% in December 2024, reflecting easing cost pressures in key sectors.

Drivers this month

• Food prices contributed 0.35 percentage points (pp), down from 0.45 pp in October.
• Energy inflation eased to 0.20 pp from 0.30 pp last month.
• Core inflation (excluding volatile items) held steady near 1.10% YoY.

Policy pulse

The current inflation rate remains below Bank Negara Malaysia’s 2.00% target midpoint, supporting a neutral monetary stance. The central bank has maintained its overnight policy rate at 3.00% since mid-2025, balancing growth and inflation risks.

Market lens

Immediate reaction: The MYR/USD pair appreciated 0.15% within the first hour post-release, reflecting relief at the softer inflation print. Malaysian government bond yields edged down by 3 basis points, signaling stable inflation expectations.

Malaysia’s inflation rate is a key macroeconomic indicator reflecting consumer price changes and purchasing power. The 1.30% YoY inflation in November 2025 compares with a 12-month average of approximately 1.50%, indicating a mild downward trend. This rate remains moderate relative to regional peers, where inflation ranges from 2.00% to 3.50% in Southeast Asia.

Monetary Policy & Financial Conditions

Bank Negara Malaysia’s steady policy rate of 3.00% has helped anchor inflation expectations. Financial conditions remain accommodative, with stable credit growth and manageable household debt levels. The ringgit’s recent strength supports import price moderation, easing imported inflation risks.

Fiscal Policy & Government Budget

The government’s fiscal stance remains expansionary but prudent. The 2025 budget includes targeted subsidies and infrastructure spending, which could exert mild upward pressure on prices. However, fiscal discipline and revenue gains from commodity exports provide buffers against overheating.

External Shocks & Geopolitical Risks

Global commodity price volatility, especially in crude oil and palm oil, poses upside inflation risks. Geopolitical tensions in key trade corridors could disrupt supply chains, potentially pushing prices higher. However, Malaysia’s diversified trade links and strategic reserves mitigate some vulnerabilities.

Drivers this month

• Food inflation eased to 1.50% YoY from 1.80% in October.
• Energy prices rose 0.80% YoY, down from 1.20% last month.
• Housing and utilities inflation remained stable at 1.00% YoY.

Policy pulse

The inflation rate remains comfortably below the central bank’s 2% target midpoint, allowing for a steady monetary policy stance. Inflation expectations remain well-anchored, with market-based measures showing minimal volatility.

Market lens

Immediate reaction: MYR government bond yields declined slightly, reflecting market confidence in contained inflation. The 2-year government bond yield fell 4 basis points, while the MYR/USD exchange rate strengthened modestly.

Looking ahead, Malaysia’s inflation trajectory will depend on several key factors. The baseline scenario projects inflation stabilizing near 1.30%–1.50% through mid-2026, supported by moderate domestic demand and stable commodity prices. However, upside and downside risks remain.

Bullish scenario (20% probability)

• Global commodity prices decline sharply, easing imported inflation.
• Monetary policy remains accommodative, supporting growth without inflation spikes.
• Supply chain improvements reduce cost pressures.
• Inflation falls below 1.00% YoY by Q3 2026.

Base scenario (60% probability)

• Inflation remains stable between 1.30% and 1.50% YoY.
• Monetary policy stays on hold, balancing growth and inflation.
• Fiscal stimulus is targeted and controlled.
• External shocks are manageable.

Bearish scenario (20% probability)

• Commodity price spikes push inflation above 2.00% YoY.
• Geopolitical tensions disrupt supply chains.
• Fiscal expansion triggers demand-pull inflation.
• Central bank forced to tighten policy in late 2026.

Overall, inflation is expected to remain moderate but requires close monitoring of external shocks and domestic policy shifts.

Malaysia’s November 2025 inflation rate of 1.30% YoY reflects a stable and manageable price environment. The steady decline from late 2024 highs signals effective monetary and fiscal policy coordination. However, vigilance is warranted given external uncertainties and potential fiscal expansion. Financial markets have so far digested the data calmly, suggesting confidence in the central bank’s inflation management. The outlook remains cautiously optimistic, with inflation expected to hover near the target range barring major shocks.

Key Markets Likely to React to Inflation Rate YoY

Malaysia’s inflation data typically influence several key financial markets. The MYR currency, government bonds, and select equities sensitive to inflation trends often respond to such releases. Below are five tradable symbols with historical correlations to Malaysia’s inflation dynamics:

• MYRUSD – The Malaysian ringgit’s exchange rate versus USD often reacts to inflation surprises, reflecting monetary policy expectations.
• FBMKLCI – Malaysia’s benchmark equity index is sensitive to inflation-driven cost pressures and consumer demand shifts.
• MAYBANK – As a major Malaysian bank, its stock price reflects interest rate and inflation outlooks.
• BTCUSD – Bitcoin often acts as an inflation hedge, with price movements sometimes inversely correlated to inflation surprises.
• USDMYR – The inverse of MYRUSD, this pair also tracks inflation-driven currency shifts.

FAQs

What is the current Inflation Rate YoY for Malaysia?

The latest inflation rate for Malaysia as of November 2025 is 1.30% year-on-year, below the previous 1.50% reading.

How does Malaysia’s inflation affect monetary policy?

Moderate inflation below the 2% target allows Bank Negara Malaysia to maintain a neutral policy stance, balancing growth and price stability.

What are the risks to Malaysia’s inflation outlook?

Risks include commodity price spikes, geopolitical disruptions, and fiscal stimulus that could push inflation above target.

Final takeaway: Malaysia’s inflation is easing steadily, supporting stable macro conditions, but vigilance on external risks remains essential.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.