The Central Bank of Malaysia kept its key interest rate unchanged at 2.75% during its August 2025 policy meeting, aligning with market expectations. The Board reiterated that the decision was appropriate and supportive of the economy amid price stability. Headline inflation averaged 1.4% over the first seven months of the year and is projected to remain moderate through 2025 and 2026, supported by subdued global cost pressures. Core inflation, which averaged 1.9% during the same period, is expected to stay stable and near its historical average. This suggests a steady pace of economic activity without signs of significant demand-driven price pressures. Meanwhile, Malaysia’s economy expanded by 4.4% in the first half of 2025, with full-year growth projected to grow within the 4.0% to 4.8% range. The outlook is underpinned by resilient consumer spending and strong investment momentum. Looking ahead to 2026, domestic demand is anticipated to remain robust and the main driver of growth.