T&S Asset Management
Listen日本語

Malaysia's inflation eases to 1.8% in September as utilities inflation slows

Published Data as of MalaysiaMacro & households
Listen0:00

A one-minute summary read by an AI voice.

Key points

Implications for lenders

With inflation at 1.8% and core inflation at 1.7%, living-cost pressure on Malaysian borrowers remains modest, which supports repayment on consumer loans. Lenders may still test affordability for the case where the temporary electricity protection ends after December.

Implications

ExecutivesStable inflation supports household repayment capacity, though the electricity bill protection is temporary and ends with the year.
InvestorsWith inflation below the policy rate, price pressures give Bank Negara Malaysia little reason to tighten.
OperatorsLiving-cost assumptions in affordability checks need little change, but utility and transport costs are worth watching when subsidies and protections are reviewed.

Facts

Headline: the consumer price index rose 1.8% in September 2026 from a year earlier, down from 1.9% in August. 1 The index stood at 137.6, against 135.2 in September 2025. 2 Core inflation was 1.7%, unchanged from August. 3

Components: inflation for housing, water, electricity, gas and other fuels slowed to 1.4%, down from 2.1% in August. 4 DOSM linked this to a revised fuel-adjustment rate for Peninsular Malaysia households; the government also extended electricity bill protection for domestic users to 800 kWh a month, extended from 600 kWh, for September to December. 5 Transport inflation rose to 2.5%, up from 2.0% in August. 6 Food and beverages rose 1.8%, down from 1.9% in August, 7 and insurance and financial services 1.2%, up from 1.0% in August. 8

Analysis

Time series: headline inflation has moved in a narrow band, from 1.9% in August 9 back to 1.8% in September, and Bank Negara Malaysia put the average for January–July at 1.8%. 10 The policy rate, 2.75% after the September meeting, 11 is above both headline and core inflation.

Region: Malaysia's inflation is lower than in Indonesia and the Philippines. Indonesia's was 3.28% in September 12 and the Philippines' 7.2%, 13 where the central bank raised its rate to 5.50% on 22 October. 14 For borrowers, low inflation means fixed instalments are not being squeezed by rising living costs in the way they are in the Philippines.

Counterpoints and uncertainties

Part of the slowdown comes from electricity measures that run only to 31 December 2026; their end or a fuel-subsidy change could lift inflation in early 2027. Transport inflation is already rising. Monthly moves of this size are small and may reverse.

Key figures

  1. Consumer price inflation, September 2026 (DOSM): 1.8% (down from 1.9% in August). Year-on-year change in the consumer price index (DOSM). Malaysia, national. Basis date: 30 Sep 2026. Source: DOSM: Consumer Price Index, Malaysia, September 2026 (release, 2026-10-19)
  2. Consumer price index level, September 2026: 137.6 (against 135.2 in September 2025). Consumer price index level (DOSM). Malaysia, national. Basis date: 30 Sep 2026. Source: DOSM: Consumer Price Index, Malaysia, September 2026 (release, 2026-10-19)
  3. Core inflation, September 2026 (DOSM): 1.7% (unchanged from August). Year-on-year change in the core consumer price index (DOSM). Malaysia, national. Basis date: 30 Sep 2026. Source: The Edge Malaysia: Malaysia's inflation eases to 1.8% in September, below expectations (2026-10-19, DOSM data)
  4. Housing, water, electricity, gas and other fuels inflation, September 2026: 1.4% (down from 2.1% in August). Year-on-year change, CPI main group housing, water, electricity, gas and other fuels (DOSM). Malaysia, national. Basis date: 30 Sep 2026. Source: DOSM: Consumer Price Index, Malaysia, September 2026 (release, 2026-10-19)
  5. Household electricity bill protection threshold, September–December 2026: 800 kWh a month (extended from 600 kWh). Monthly consumption up to which domestic users are protected from the fuel-adjustment charge, 1 September–31 December 2026. Malaysia, national. Basis date: 1 Sep 2026. Source: DOSM: Consumer Price Index, Malaysia, September 2026 (release, 2026-10-19)
  6. Transport inflation, September 2026: 2.5% (up from 2.0% in August). Year-on-year change, CPI main group transport (DOSM). Malaysia, national. Basis date: 30 Sep 2026. Source: DOSM: Consumer Price Index, Malaysia, September 2026 (release, 2026-10-19)
  7. Food and beverages inflation, September 2026: 1.8% (down from 1.9% in August). Year-on-year change, CPI main group food and beverages (DOSM). Malaysia, national. Basis date: 30 Sep 2026. Source: DOSM: Consumer Price Index, Malaysia, September 2026 (release, 2026-10-19)
  8. Insurance and financial services inflation, September 2026: 1.2% (up from 1.0% in August). Year-on-year change, CPI main group insurance and financial services (DOSM). Malaysia, national. Basis date: 30 Sep 2026. Source: DOSM: Consumer Price Index, Malaysia, September 2026 (release, 2026-10-19)
  9. Headline CPI inflation (DOSM): 1.9% (up from 1.8% in July). Year-on-year change in the consumer price index (DOSM). Malaysia, national. Basis date: 31 Aug 2026. Source: The Star: Malaysia's inflation rises to 1.9% in August (2026-09-18, DOSM data)
  10. Average headline inflation, January–July: 1.8%. Average year-on-year headline CPI inflation, January–July 2026. Malaysia, national. Basis date: 31 Jul 2026. Source: Bank Negara Malaysia: Monetary Policy Statement (3 September 2026)
  11. Overnight Policy Rate (BNM): 2.75% (unchanged). Bank Negara Malaysia policy rate. Malaysia, national. Basis date: 3 Sep 2026. Source: Bank Negara Malaysia: Monetary Policy Statement (3 September 2026)
  12. Headline CPI inflation (BPS): 3.28% (up from 3.19% in August). Year-on-year change in the consumer price index. Indonesia, national. Basis date: 30 Sep 2026. Source: ANTARA: Inflasi tahunan RI capai 3,28 persen pada September 2026 (2026-10-01, BPS data)
  13. Headline CPI inflation (PSA): 7.2% (up from 6.1% in August; matches April 2026). Year-on-year change in the consumer price index. Philippines, national. Basis date: 30 Sep 2026. Source: Inquirer: PH inflation climbs to 7.2% in September (2026-10-06)
  14. BSP policy rate after the 22 October 2026 meeting: 5.50% (up from 5.0%). BSP target reverse repurchase (RRP) rate. Philippines, national. Basis date: 22 Oct 2026. Source: Philstar: Inflation risks prompt BSP to hike rates anew (2026-10-22)

Sources

  1. DOSM: Consumer Price Index, Malaysia, September 2026 (release, 2026-10-19)primary
  2. The Edge Malaysia: Malaysia's inflation eases to 1.8% in September, below expectations (2026-10-19, DOSM data)
  3. The Star: September inflation eases slightly to 1.8% as utilities cost moderates (2026-10-19, DOSM data)
  4. Bank Negara Malaysia: Monetary Policy Statement (3 September 2026)primary
Weekly email

SEA Lending Brief

A weekly summary of lending, credit and regulation across Southeast Asia.

We will email you a link to confirm. Unsubscribe at any time. Privacy policy

Reports are for information only and are not investment advice.

A Japanese version of this article is available: 日本語版

More on Malaysia

24 Oct 2026 · RegulationBNM plans 2027 national risk assessment as recent penalties target screening and due-diligence gaps21 Oct 2026 · CreditMalaysia's BNPL balances reach RM6.6 billion at end-June; arrears share at 3.3%19 Oct 2026 · Macro & householdsMalaysia's growth slows to 5.3% in third-quarter advance estimate as mining contracts

Malaysia overview: key indicators and all articles →