Malaysian headline inflation data for the month of September is set to be released tomorrow. According to a DBS research report, the CPI inflation is likely to have accelerated to 0.9 percent year-on-year from 0.2 percent.
In the midst of higher energy prices, the risk on inflation is high. However, the earlier zero-rating of the GST has reduced the trajectory of inflation considerably. Plainly, inflation might have been a lot higher if not the policy change.
Nevertheless, the government has introduced the Sales and Services Tax again. This was in effect from 1 September 2018, which should be manifested in the headline figure. Inflation is expected to accelerate above 1 percent in the months ahead, added DBS Bank.