Macroeconomic Forecast Malaysia

While Bank Negara Malaysia (BNM) had been seeking to cut interest rates in 2008 to ensure that the recent surge in domestic demand stays well supported, mounting inflationary pressures are now likely to force the central bank to adopt a far more cautious approach to monetary policy going forward. Consumer price inflation dipped slightly from December's 10-month high of 2.4% y-o-y in January, slowing to 2.3%, but inflation pressures nonetheless remain as global food and fuel costs continue to climb steeply higher.

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