Malaysia’s Inflation Eases to 1.8% in July 2026, Driven by Moderating Transport Costs

KUALA LUMPUR, Aug 17 — Malaysia’s headline inflation eased to 1.8 per cent in July 2026 from 1.9 per cent in June, as price growth in key sectors such as transport, insurance, and personal care moderated, the Department of Statistics Malaysia (DOSM) reported today.

According to DOSM, the Consumer Price Index (CPI) reached 137.1 points in July, up from 134.7 points recorded in the corresponding month last year. The transport sector served as a primary driver of the overall moderation, with its inflation rate slowing significantly to 1.4 per cent in July from 2.8 per cent in June.

Price pressures cooled across several other major consumer categories. Inflation in personal care, social protection, and miscellaneous goods and services moderated to 2.9 per cent in July from 3.4 per cent in June, while restaurant and accommodation services eased to 2.0 per cent from 2.6 per cent. Education inflation edged down slightly to 2.0 per cent from 2.1 per cent.

The insurance and financial services group recorded a sharp drop in inflation, easing to 1.1 per cent in July compared to 5.7 per cent in June, while health services edged down to 1.1 per cent from 1.2 per cent. Furnishings, household equipment, and routine household maintenance also recorded a minor moderation, rising 0.3 per cent compared with 0.4 per cent in the previous month.

Conversely, price growth accelerated in selected segments. Inflation in the information and communication sector rose to 3.4 per cent in July from 2.4 per cent in June, while both the food and beverages group and the housing, water, electricity, gas, and other fuels group increased to 1.8 per cent from 1.4 per cent. Recreation, sport, and culture edged up to 1.2 per cent from 1.1 per cent, while clothing and footwear recorded a slight increase to 0.1 per cent from zero.

Breaking down the CPI basket, DOSM noted that 65.3 per cent of monitored items — or 374 out of 573 — recorded price increases. Among those, 367 items registered increases of 10 per cent or lower, while seven items saw price increases exceeding 10 per cent. A further 157 items (27.4 per cent) recorded price declines, while 42 items remained unchanged.

At the regional level, seven states registered inflation rates above the national benchmark of 1.8 per cent. Negeri Sembilan recorded the highest rate at 2.5 per cent, followed by Kedah and Pahang at 2.3 per cent each, the Federal Territory of Kuala Lumpur at 2.2 per cent, Johor at 2.1 per cent, the Federal Territory of Labuan at 2.0 per cent, and Sabah at 1.9 per cent. Food and beverage inflation increased across all states except Kelantan and Labuan, where rates remained unchanged.

On a month-on-month basis, headline inflation was flat in July, matching the rate recorded in June. Within monthly movements, food and beverages rose 0.3 per cent compared to 0.2 per cent in June, while transport and personal care recorded declines of 1.1 per cent and 0.5 per cent, respectively.

–NMT