Inflation expectations of Malaysian households

The index for Malaysia weakened to 64 from 75 as respondents expressed concern about consumer sentiment. A reading above 50 indicates a positive outlook.

PETALING JAYA: Inflation expectations matter because they affect key economic and financial variables such as actual inflation, wage, spending and financial asset valuations.

Looking specifically at inflation expectations of households in Malaysia, households form their inflation expectations by considering both backward and forward-looking factors, such as recent shopping experiences and current income levels, as well as the future outlook of the domestic economy.