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Emerging Markets Experience Stronger Disinflationary Impact, Malaysia Inflation at 3.0%

Moody's Investors Service predicts that emerging markets (EMs) will face a stronger disinflationary impact compared to advanced economies.

This is due to the softening of food and energy prices and the strengthening of EM currencies against the US dollar. Inflation in most major EMs with inflation-targeting frameworks is expected to moderate further by the end of 2024.

Specifically, Malaysia's inflation rate is projected to be 3.0% in 2023. Moody's credits the proactive response of Malaysia's central bank and the subsidization of essential commodities for keeping inflation in check. However, tightening global financial conditions and domestic challenges pose macroeconomic challenges for EMs.


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