Your grocery receipt can feel stubbornly expensive even when the inflation headline sounds better. September’s new figures explain why those two experiences can sit side by side.
Malaysia’s annual inflation rate eased to 1.8%, from 1.9% in August, according to the Department of Statistics Malaysia’s release on 19 October. That is a slower increase in prices. It does not mean the average basket became cheaper than it was a year ago.
The Consumer Price Index, or CPI, stood at 137.6, compared with 135.2 in September 2025. The direction still matters: prices, on average, were higher. The pace of the increase had softened.
So if your first reaction was, “Then why am I still paying so much?”, you have not necessarily misunderstood your own shopping. The headline answers a narrower question than whether daily life now feels affordable.
Slower increases leave the earlier increases in place
Think about the difference between a price and the speed at which it changes. If something has already become more expensive, a smaller increase afterwards does not take it back to its old price. That would require an actual reduction.
This is why a lower inflation rate can be encouraging without producing an immediate sense of relief at the checkout. It describes what happened to the rate of change, rather than promising a return to the prices people remember.
Bank Negara Malaysia makes this distinction in its explanation of inflation and living costs. Price levels are what things cost at a particular time; inflation measures how a fixed basket’s prices change. The amount needed to maintain a household’s standard of living is a broader issue again.
Put simply, a national percentage is not a new supermarket price list. It cannot tell you that the exact brands, quantities and shops you use have all moved in the same direction.
There is more than one comparison in the release
The annual figure compares September with September last year. Bernama’s report of the DOSM release also puts the month-on-month increase at 0.1%, down from 0.3% in August.
Those figures answer different questions. The first looks across a year; the second compares neighbouring months. Neither is the amount by which every individual item changed.
Some groups also moved differently. The housing, water, electricity, gas and other fuels group’s annual increase slowed to 1.4%, from 2.1%. Personal care, social protection and miscellaneous goods and services moderated to 2.8%, from 3.2%.
These are grouped averages. A household should not read the housing figure as a notice that its own landlord has changed the rent, or that every utility charge has been reduced. The published category and the individual bill operate at different levels.
Your basket is allowed to look different
DOSM constructs the CPI around a representative basket with quantities and quality held constant, so changes can track prices rather than a switch to different products. It groups spending into 13 broad divisions, ranging from food and transport to education and health.
That consistency is useful. Without it, spending more because you bought more could be confused with paying more for the same things. A price measure needs to separate those two changes.
But a representative basket is not a photograph of every Malaysian household. One family may spend a larger share on food; another may have a different transport pattern or housing situation. That changes which price movements matter most to them.
OpenDOSM’s low-income CPI documentation makes this especially clear. Its separate series uses different expenditure weights, with food carrying greater importance, for households earning below RM3,000 a month. It also cautions that a particular person’s inflation experience can be above or below the national figure without invalidating the average.
That separate series explains why spending weights matter. September’s 1.8% headline should not be passed off as the inflation rate for every low-income household.
Location makes a difference too
Eight states or federal territories recorded annual inflation above the national 1.8%, according to Bernama’s account. Negeri Sembilan and Labuan were at 2.4%, while Johor, Kedah and Putrajaya were at 2.2%.
Again, this is not a ranking of the cheapest places to live. A place with a lower rate of increase can still have a different starting level of prices, and households have different needs. Comparing percentage changes alone will not settle a decision about where to rent or work.
For a more useful look at your own spending, compare like with like: the same quantity, the same billing period and the same kind of purchase. Keep a change in consumption separate from a change in price. Otherwise, a larger bill can hide several different explanations.
The other number is your income
BNM’s household-focused analysis explains why moderate inflation can coexist with pressure on living standards. What matters for purchasing power is the relationship between prices and incomes, not just one of those numbers on its own.
If essentials take up a large part of your income, even smaller increases can be difficult to absorb. A calmer national headline does not create extra room in a particular household’s budget by itself.
The policy response has limits too. BNM explains that interest rates influence borrowing, saving and demand, but cannot by themselves solve every supply disruption or household affordability problem. That is why a single monthly CPI release should not be treated as a promise about the next interest-rate decision or the future cost of a particular loan.
September’s release is therefore a useful sign about the pace of price rises, with clear limits. It is not a pay-rise announcement, a rent reduction or a guarantee about next month’s groceries.
Read the improving rate alongside the level of your actual bills and the income available to cover them. That is where a statistical improvement either starts to feel real — or still leaves a household waiting.
Sources & further reading
Prepared with AI assistance from linked reporting. The cover is an AI-generated editorial illustration. Spotted something we should correct?