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KUALA LUMPUR: Hong Leong Investment Bank (HLIB) expects inflation to rise in 2025, driven by domestic policy reforms such as the RON95 fuel subsidy rationalisation and an expanded sales and services tax (SST) scope.  

The bank noted that global price pressures, potentially exacerbated by US President Donald Trump’s policies, could also influence inflation trends next year.  

"Considering these factors, along with sustained domestic growth and the US Federal Reserve's recent hawkish pivot, we expect Bank Negara Malaysia to keep the overnight policy rate at 3.0 per cent in 2025, adopting a wait-and-see stance," HLIB said in a research note today.  

Malaysia's headline inflation eased to 1.8 per cent year-on-year in November, down from 1.9 per cent in October, amid moderating transport costs and a larger decline in the information and communications category.  

HLIB noted that November's inflation data was below the consensus forecast of 2.1 per cent year-on-year.

Meanwhile, core inflation remained steady at 1.8 per cent year-on-year.