In the first five months of 2025, Malaysia’s inflation rate was a mild 1.4%. However, Malaysians are expected to face higher inflation rate in the second half of the year. Starting from 1 Jul, the scope of the Sales and Services Tax has been significantly expanded to cover a wider array of consumer and luxury goods as well as over 30 additional service categories. At the same time, a new electricity tariff structure took effect on 1 Jul, where tariffs are based on the amount of electricity used. Producers are likely to pass on the higher costs to consumers.

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