Macroeconomic Forecast Malaysia

Malaysia's headline consumer price inflation (CPI) slowed from 3.4% y-o-y in October to 3.3% in November and we expect inflationary pressures to continue to cool over the coming months. Commodity prices have remained on a downward trend since early 2011. In line with our commodities team's view that commodity prices will see further declines, we expect cost-push inflationary pressures to ease as we head into 2012. Meanwhile, M3 money supply growth also slowed from 12.5% y-o-y in September to 11.4% in October, in line with our view that inflationary pressures are becoming a secondary concern for the central bank.

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