In its report, the research firm said that although businesses would be affected by the fluctuations in global commodity prices, cost pressures would be higher this year due to the effects of policy changes such as subsidy rationalisation, alongside rising fuel prices.

“On that note, we foresee that consumer inflation would be slightly higher at 2.7% this year (2023: 2.5%), mainly due to supply-side changes,” it said.

Malaysia’s PPI, which measures the price changes of goods at the producer level rose for the third straight month, marking the fastest rise since December 2022.

MIDF noted that by sector, the manufacturing sector saw input costs rising faster at 0.8% y-o-y (March 2024: 0.6% y-o-y).

The mining sector’s inflation was higher at 10% (March 2024: 8.3%), the steepest rise in 22 months.

However, price inflation for the agricultural sector eased slightly to 5.4% (Mar 2024: 5.5%).

Meanwhile, electricity, gas and water supply costs have expanded rapidly by 1%, the highest in 10 months after a slow rise of 0.1% y-o-y in the previous two months.

“The cost of processing crude materials rose at the same pace of 7.4% as in the previous month, which is still the highest reading since June 2022.

“The cost for processing intermediate materials deflated further but marginally at 0.1% (March 2024: -0.4% y-o-y), the softest deflation in a year,” it said.

The processing cost of finished goods surged by 2.4% (March 2024: 1.9%), the steepest in seven months.