Malaysia's inflation jumped 1.5% in February

Policy rate likely to remain unchanged, says analyst.

According to the Bank of America Merrill Lynch, Malaysia's headline inflation edged up to +1.5% yoy in Feb from +1.3% in Jan. 

BofAML further adds that the increase was led by food & beverages (+3.3% yoy), likely on Chinese New Year festivities. Prices also rose in segments such as hotels & restaurants (+2.2%), education (+2.2%), and alcohol & tobacco (+2%). On a month-on-month basis, consumer prices rose +0.2% in Feb from the previous month.

Here's more:

Prime Minister Najib launched the Pemandu 2012 annual report last night, highlighting "huge economic strides" made under his administration.

He said that most objectives in the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP) have been achieved, citing rising household incomes, reduced poverty, and strong economic growth.

Since the inception of the ETP in 2010, 149 projects have been announced, with a total of RM211.3bn in committed investments. This is expected to generate RM135.6bn in Gross National Income (GNI) and create +408K jobs by 2020.

The rise in investment spending and spillover effects to domestic industries led growth to come in a higher-than-expected +5.6% yoy in 2012. 

BNM will likely remain on hold at the next policy meeting in May. We are penciling in BNM leaving the overnight policy rate unchanged this year. Inflation remains benign and growth is resilient. We are forecasting GDP growth at +4.7% and inflation at +2.3% this year.