The determinants of inflation rate in Malaysia / Nur Nabila Najwa Shahral Hisham

Rising prices in goods and services are often related to the economic growth of the country. Inflation is highly influenced by the increase of production cost. Inflation could affect the economy in positive or negative ways to one country. When inflation is high, the cost of living rises along with it, resulting in a slowdown in economic growth. Malaysia is not exceptional in facing higher inflation rates. Therefore, it became a serious matter over a period of time and thus this research was carried out to investigate and determine factors that triggered higher inflation rate in Malaysia as well as to investigate how independent variables influence the dependent variable. The research is performed using secondary data from an economic indicator which are gross domestic product (GDP), foreign direct investment (FDI), exchange rate (EXR). The research sample consisted of time-series data on Malaysia's inflation rate from 1991 until 2020. The result of this research showed that all of the independent variables which are gross domestic product (GDP), foreign direct investment (FDI) and exchange rate (EXR) have a positive relationship with the inflation rate. Using the economic indicators presented in this research, the government's policy to analyse the inflation rate would benefit from this research.