For the full-year of 2024, the PPI rose marginally by 0.3% year-on-year.
PETALING JAYA: After three months of contraction, Malaysia saw a marginal producer inflation last December amid a mixed performance across key sectors.
The Statistics Department reported that the producer price index (PPI), which measures price changes at the producer level, rose by 0.5% year-on-year (y-o-y) in December 2024.
In November, the PPI had shrunk by 0.4% y-o-y.
The rebound in December took place amid the PPI increase in the United States and Japan.
China, however, recorded a decline which is the 27th consecutive month of producer deflation.
Elaborating on Malaysia’s PPI rebound, chief statistician Datuk Seri Mohd Uzir Mahidin said the agriculture, forestry and fishing sector recorded a significant increase of 23.8% y-o-y in December.
This was due to the growing of perennial crops.
Meanwhile, the mining sector contracted by 7% y-o-y, a smaller decline than the previous month’s 8.3%.
The decline was primarily due to the extraction of crude petroleum index, which fell by 9.7%.
“The manufacturing sector saw a slight decline of 1%, with the key subsectors of the manufacture of coke and refined petroleum products dropping sharply by 15.5% and the manufacture of computer, electronic and optical products decreasing by 1.5%.
“On the other hand, the electricity and gas supply sector recorded a 0.9% increase, while the water supply sector continued its upward trend by 6.7%,” Mohd Uzir said in a statement.
On a month-on-month (m-o-m) basis, the PPI local production continued to increase by 0.8% in December, albeit at a slower pace compared to 1.4% in November.
The agriculture, forestry and fishing sector expanded by 1.6% m-o-m, while the manufacturing sector grew by 0.8%.
The other sectors saw a decline.
Mohd Uzir also noted that the PPI local production continued to decline by 0.8% in the fourth quarter of 2024, as compared to a 0.2% decline in the third quarter of 2024.
The decline was due to the mining (11%) and manufacturing (1.8%) sectors.
Conversely, the agriculture, forestry and fishing sector recorded a significant increase of 19.8%, while water supply and electricity and gas supply increased by 6.7% and 0.9%, respectively.
Meanwhile, on a quarter-on-quarter basis, the PPI showed a 0.8% decline, as compared to a 1.6% decrease in the third quarter of 2024.
For the full-year of 2024, the PPI rose marginally by 0.3% y-o-y after posting a decline of 1.9% in 2023.
The increase was particularly supported by the 7.9% rise in the agriculture, forestry and fishing index, as compared to a double-digit contraction of 13.8% in the previous year.
“Likewise, the water supply and electricity and gas supply sectors increased by 6.5% and 0.6%, respectively.
“However, both the mining and manufacturing indices declined by 2% and 0.3%, respectively.”
Looking ahead, citing the World Bank’s “Commodity Market Outlook”, Mohd Uzir said the overall commodity outlook for 2025 indicates a downward trend.
Prices are expected to drop by 5%, followed by a 2% decrease in 2026.
The downturn is attributed to factors such as oversupply in energy markets, overcapacity in metals and stabilising agricultural prices.
“The US Energy Information Administration forecasts that global oil production growth will surpass demand, leading to an oversupplied market.
“Consequently, Brent crude prices are expected to average US$74 per barrel in 2025, an 8% decrease from 2024, and decline further to US$66 per barrel in 2026,” he added.
