Despite Fuel Subsidy Implementation

WEB: BNM Maintains 2024 Inflation Forecast at 20-35%

Despite Fuel Subsidy Implementation

Key Takeaways

• BNM's 2024 inflation forecast remains unchanged at 20-35%.
• The 2023 forecast has been slightly adjusted from 21-36% to 20-35%.
• BNM governor expects inflation to range between 20-35% in 2024.
• Continued resilience in the labor market is observed.
• Malaysia's consumer price index (CPI), the main inflation gauge, is projected to increase by 2-3.5% in 2024.
• Bank Negara Malaysia (BNM) has revised its inflation forecast for 2024, projecting an average between 20% and 35%.

In its annual review, BNM has slightly adjusted its inflation forecast for 2024, predicting it to average between 20% and 35%.

According to BNM governor Abdul Rasheed, the revised forecast reflects the expected impact of continued resilience in the labor market and the implementation of targeted fuel subsidies.

The central bank projects headline and core inflation to average within the 20-35% range for 2024. This is slightly lower than the previous forecast of 21-36%.

1. The adjustment takes into account the government's decision to implement targeted fuel subsidies, which are expected to partially mitigate inflationary pressures.
2. The continued resilience of the labor market is also seen as a positive factor, supporting consumer spending and economic growth.
3. However, the war in Ukraine and ongoing global supply chain disruptions continue to pose risks to the inflation outlook.

BNM emphasized that the inflation forecast remains subject to change, depending on evolving domestic and global economic conditions.

The central bank will continue to closely monitor inflation developments and take appropriate policy actions to ensure price stability and support sustainable economic growth.