Across the Causeway, Singapore’s headline inflation hit 5.6% in May, the highest since November 2011, and up from 5.4% in April. Malaysia’s inflation stood at 2.5% last year, after a deflation of 1.1% in 2020. “Electricity prices under the Imbalance Cost Pass-Through (ICPT) mechanism are subject for a revision in July, which may lead to a hike, given the elevated prices of electricity inputs, namely gas and coal,” they said in a note. “For 2023, we expect CPI to grow by 3.2% year-on-year, assuming some adjustments to fuel prices for the high-income groups,” they said. Higher demand-driven inflation owing to normalising domestic activity and labour market improvements would continue to fuel upside risks to underlying inflation, he said.
