Malaysia’s inflation dipped to below three percent year-on-year in January compared to 3.2 percent for all of last year, official data showed today.

The Department of Statistics said in a statement that consumer prices for January increased by 2.7 percent year-on-year compared to 3.0 percent the previous month.

Yeah Kim Leng, chief economist with financial research firm RAM Holdings, said inflation was falling in line with an easing trend in global prices.

But he emphasised that 30 percent of the items in the Malaysian basket of goods for the index were price-controlled.

“As such, it will have the effect of moderating the entire basket of goods,” he said.

“However, more importantly, the latest consumer price index figures... are in line with what we are expecting globally this year as prices are expected to ease this year given the state of the international markets,” he added.

Malaysia's economy grew 5.2 percent in the fourth quarter of 2011, up slightly over the year-earlier period as public spending offset weakness in export markets.

But persistent world economic uncertainty caused full-year 2011 growth to slip to 5.1 percent, down from a 7.2 percent expansion in 2010, the central bank added.

The central bank maintained its benchmark borrowing rate last month. It has kept the rate consistent since May.

- AFP