Inflation in September eases slightly to 1.8%

By the Editorial Team · Tuesday, October 20, 2026

Malaysia's consumer inflation rate edged down to 1.8% year-on-year in September 2026, driven primarily by slower increases in utility costs following government measures to ease electricity bills. This slight deceleration suggests that policy efforts are helping to moderate inflationary pressures as the third quarter ended with a steady 1.9% inflation rate.

Consumer inflation in Malaysia eased slightly in September 2026, with the consumer price index (CPI) rising 1.8% year-on-year, down from 1.9% in August, according to the Statistics Department. This figure was marginally below market expectations, as a Reuters poll had forecast a 1.9% increase, while UOB Global Economics & Market Research had anticipated a 2% rise.

For the third quarter overall, inflation remained steady at 1.9%, matching the rate recorded in the previous quarter. The moderation in September’s inflation was largely attributed to slower increases in the cost of utilities, which encompass housing, water, electricity, gas, and other fuels. The utilities sub-index grew by 1.4%, compared to 2.1% in August.

The department cited adjustments in the Automatic Fuel Adjustment (AFA) rate for domestic electricity users in Peninsular Malaysia as a key factor behind the slower rise in electricity, gas, and fuel costs. The government has extended electricity bill protection for households, raising the threshold from 600 kilowatt-hours (kWh) to 800 kWh per month. This measure applies to consumption from September 1 through December 31, 2026.

Other categories showing eased inflationary pressure included personal care, social protection, and miscellaneous goods and services, which rose 2.8% in September after a 3.2% increase in August. Inflation rates also softened for the information and communication sector and the food and beverages group, both registering 1.8%, down from 2.6% and 1.9%, respectively, in the previous month.

In contrast, transport costs edged higher, rising 2.5% in September compared to 2% in August. The health sector experienced a slight uptick as well, with prices increasing 1.4%, up from 1.3% the prior month.

Overall, the data suggest a modest easing of inflationary pressures in Malaysia as the third quarter closed, influenced in part by government interventions aimed at cushioning utility costs for domestic consumers.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.