The research house said robust growth and elevated as well as broad-based inflation will prompt further tightening of the monetary policy.

“We will watch for BNM’s assessment of its monetary policy stance, which may shed light on how close the central bank is to the end of the tightening cycle,” it said in a note today.

It also said growth remains strong in Malaysia, with full-year 2022 gross domestic product (GDP) growth expected to come in at 8.8%.

“Inflation is elevated and broad-based, reflecting robust demand inflation amid rising manufacturing and services wages, although services wages are still running below medium-term trend growth,” it said.

However, Standard Chartered said upside inflation risks remain, with broad-based inflationary pressure, rising services costs and continuous high import prices.

“Following a likely January hike, we expect a pause in March, before another 25 basis points hike in May, assuming the government announces some form of subsidy adjustments for the second half of 2023.

“If subsidies are removed for only 20% of RON95 users, we estimate headline inflation will increase by only 0.9% on an annual basis,” it added.