KUALA LUMPUR: Malaysia can expect a firm recovery in the second half of this year as economic activities pick up and provided there is no second wave of the Covid-19 pandemic outbreak, the Statistics Department said.
In a statement issued on Monday, it said despite a 17.9% contraction in GDP in the second quarter, the leading index (LI) -- which provides an early signal of the future economic direction -- grew at a faster pace in June.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the LI rose 4.5% in June 2020 (May 2020: 0.6%) based on year-on-year comparison.
“Meanwhile, the LI recorded 3.7% in June 2020 as against the previous month. The month-on-month growth of LI was contributed mainly by the number of new companies registered (1.5%) and real imports of other basic precious & other non-ferrous metals (1.3%), ” he said.
He said the LI shows a better signal of economic direction as the economic sectors were allowed to resume operations while adhering to the new normal starting June 10 with the implementation of the Recovery Movement Control Order (RMCO).
Mohd Uzir said the Coincident Index (CI) which measures the overall current economic performance, recorded 110.0 points in June 2020 from 113.5 points in June 2019, decreased by 3.1% year-on-year.
On a monthly basis, the CI rose 8.7% primarily driven by capacity utilisation in the manufacturing sector (3.2%) and industrial production index (2.5%).
He said the June CI showed signs of improvement (June 2020: -3.1%; May 2020: -11.0%) which was is in line with the encouraging growth of exports which bounced to record an increase of 8.8% from a year ago.
Manufacturing sales value rebounded to 4.1% after shrinking for three consecutive months. The volume index of retail trade saw a recovery with June 2020: -11.2%; May 2020: -18.0%, he said.
Mohd Uzir said as the economy recovers from the pandemic, it was crucial for the public to maintain their physical distancing while institutions have to restore demand and foster investment.