Malaysia cautious as war-led inflation to hit later this year
When the costs of production are higher, an impact will be evident, says Economy Minister Akmal Nasrullah Mohd Nasir
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[KUALA LUMPUR] Malaysia is bracing for a delayed uptick in inflation as the impact of the Iran war filters through to consumer prices later in 2026, said Economy Minister Akmal Nasrullah Mohd Nasir.
In a monthly ministry briefing on Monday (Apr 20), he said: “The higher inflation is no longer restricted to fuels, as the costs of raw materials for construction and manufacturing have also risen, affecting production costs.
“The effect on our inflation has been lagging due to the strength of our inventory, but when the costs of production are higher, there will be an impact.”
Inflation accelerated to 1.7 per cent in March, the fastest pace in more than a year, from 1.4 per cent in February, with transport costs among the main drivers.
Alongside continuing to subsidise fuel, the Malaysian government trimmed fuel quotas in March after Brent crude surged past US$100 a barrel amid the conflict.
Economic growth also slowed in the first quarter, as the Middle East crisis began weighing on key sectors including manufacturing and services – signalling broader pressures ahead. BLOOMBERG
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