However, it noted that prolonged weakness in the ringgit and surge in petrol and diesel prices following subsidy rationalisation efforts may pose downside risks to Malaysia’s producer price index (PPI) and consumer price index (CPI) in 2024.

In a research note today, MIDF Research commented that Malaysia’s producers’ prices have deflated by 0.3% year-on-year (y-o-y) in October 2023 (September: +0.2% y-o-y).

The research house said the decline was underpinned by moderating PPI inflation of crude materials by 5.3% y-o-y (September: +5.4% y-o-y).

Meanwhile, prices of intermediate goods deflated further for the seventh month in a row at 3% y-o-y. Input inflation for finished goods softened to a 16-month low at 2.2% y-o-y.

Compared to the previous month, the overall producers’ prices fell by 0.3% month-on-month (m-o-m) while intermediate materials and finished goods costs dropped by 0.2% m-o-m and 0.6% m-o-m respectively, while prices of crude materials were unchanged on a m-o-m basis.

For the cumulative ten months of 2023, overall PPI fell by 2% y-o-y while input inflation for crude materials, intermediate materials and finished goods registered -11.4% y-o-y, -0.8% y-o-y and +3.4% y-o-y respectively, it added.