SHAH ALAM - Malaysians already struggling to cope with rising living costs may soon have to tighten their belts further, with retailers warning that another round of price increases is expected to take effect this month.
The latest report by Retail Group Malaysia (RGM) shows a challenging picture for consumers, as businesses across multiple sectors grapple with escalating operating expenses linked largely to higher fuel costs and global geopolitical tensions.
According to the report, retail prices are expected to climb again in June, adding to the financial strain already being felt by households nationwide.
The warning comes amid a steady rise in inflation throughout the year. Malaysia's inflation rate stood at 1.6 per cent during the first quarter of 2026 before accelerating to 1.9 per cent in April.
Among the categories recording the sharpest increases were insurance and financial services, which rose by 4.9 per cent, followed by personal care and miscellaneous services at 4.8 per cent. Transport-related costs also climbed 4.1 per cent.
Even routine expenses such as eating out have become more expensive, with prices at restaurants, cafes and takeaway outlets increasing by 2.6 per cent.
RGM said the anticipated increase in retail prices is expected to further impact consumer spending patterns in the coming months.
The report attributed much of the current inflationary pressure to the prolonged geopolitical instability involving the United States, Israel and Iran, which has contributed to volatility in global energy markets.
The knock-on effects have been felt locally through higher fuel prices.
Between early March and early June, the price of unsubsidised RON95 petrol surged from RM2.67 to RM3.72 per litre, representing an increase of about 39 per cent.
Diesel prices in Peninsular Malaysia recorded an even steeper rise of approximately 45 per cent, reaching RM4.67 per litre.
RGM noted that higher fuel costs inevitably ripple through the wider economy, affecting the prices of essential goods and services.
From groceries and meals at eateries to vehicle maintenance, house rentals, medical treatment, tuition fees and airline tickets, businesses are increasingly passing on higher operating costs to consumers.
The report warned that more sectors could follow suit in revising prices upward as they attempt to remain viable amid mounting expenses.
The worsening cost environment has also prompted RGM to revise its outlook for the retail industry.
While retailers had initially anticipated stronger growth, the sector's performance in the first quarter failed to meet expectations.
Retail sales expanded by 3.7 per cent, below the 4.4 per cent growth projected in March.
Consequently, RGM lowered its full-year retail sales growth forecast for 2026 from 4.0 per cent to 3.8 per cent, citing weakening consumer purchasing power as households become more cautious with spending.