Malaysians are set to face increasing cost of living pressures in 2025, with inflation forecast to surge to 2.8% due to subsidy cuts and global uncertainties.
MIDF Research expects the increase to be driven by domestic policy changes, including a mid-year reduction in the RON95 subsidy and the expansion of the scope of the sales and services tax (SST).
BIMB Securities also expects inflation to reach 2.7% in 2025, citing the same reasoning in May.
Meanwhile, external pressures such as rising oil prices and currency volatility are also expected to contribute to higher inflation.
According to BIMB Securities, the inflation trajectory in 2025 will be influenced by a combination of domestic policy factors and external risks, including volatile global commodity markets and geopolitical tensions.
While inflation is expected to rise modestly compared to previous years, cost pressures remain a challenge for households and businesses, with most analysts expecting the central bank to remain on a cautious monetary policy next year.
With inflation at 2.8%, the price of basic goods could double by 2024, putting significant pressure on households.
Is the government prepared to help the people ease the burden, or is this the price to pay for long-term economic stability?
