Malaysia's inflation pressures likely remain low

Malaysia's Department of Statistics will announce May inflation data on 17 June. 

The implementation of a 6% goods and services tax (GST) in April has had less of an effect on inflation than initially feared. Inflation was only 0.9% m/m in April 2015 versus the average 0.2% m/m rise for the month in the years 2011-14. 

The smallerthan-expected rise in inflation from GST implementation may have been due to a number of items being exempted from GST and the removal of the sales and service tax. 

Domestic fuel prices held steady in May, which may have sustained the decline in transport prices. However, domestic fuel prices have been adjusted for June, which should moderate the fall in transport prices for the coming month.

"We forecast a rise of 1.9% y/y in headline inflation, similar to 1.8% y/y inflation in April",said Standard Chartered in a report on Thursday.