Malaysia CPI: from deflation to inflation - just about

KUALA LUMPUR -- The rebound in Malaysia's February CPI was slightly weaker than expected, although inflation is now finally back in positive territory, ANZ Bank says in a note on monthly economic data .

The bank says Malaysia's monthly increase in transport costs was the highest of the various categories, while food prices were nearly flat. Core inflation remained broadly stable, although the prices of some discretionary services like "restaurants and hotels" fell due to activity restrictions in February.

"We expect CPI inflation to accelerate further, as commodity prices rise further and base effects turn unfavourable," ANZ says. "BNM is seen holding the rates unchanged this year, while fiscal policy will likely do the heavy lifting for growth."

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