Economy on recovery path as leading index rose 8.6% in Sept

Malaysia continues to chart an economic recovery despite the challenging circumstances.

KUALA LUMPUR: Malaysia's economy is expected to continue its recovery as seen in the Leading Index (LI), which increased by 8.6 per cent to 109.5 points in September 2020 compared with 100.8 points a year ago, said the Statistics Department.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the monthly change in the LI showed the same trend, rising 0.9 per cent (August 2020: - 0.5 per cent) and the growth was driven by imports of, among others, semiconductors particularly electronic integrated circuits.

"Correspondingly, the number of new companies registered especially in the wholesale and retail trade sub-sector significantly contributed to the increase," he said in a statement on the Malaysian Economic Indicators: Leading, Coincident and Lagging Indexes for September 2020.

"Concurrently, the growth rate of LI (smoothed) remained above trend which indicates that Malaysia continues to chart economic recovery despite the challenging circumstances.”

The LI performance is used to predict the economic direction in an average of four to six months ahead.

In addition, he said the announcement of Budget 2021 which targeted people's prosperity, business continuity and economic resilience will revitalise the economy from the pandemic aftermath.

However, the LI signal may be dampened by the rising number of COVID-19 cases and extension of the Conditional Movement Control Order (CMCO) to-date.

Mohd Uzir said the Coincident Index (CI) attained 113.1 points in the reference month, which showed a better annual growth trend, registering a decrease of 1.0 per cent in September 2020 against -2.3 per cent in August.

"The CI which reflects the current state of the economy increased further to a monthly growth of 1.0 per cent in September (August: 0.5 per cent) with Volume Index of Retail Trade (0.3 per cent) as the main driver.

"Accordingly, the sales value of wholesale and retail trade recorded RM110.8 billion in September with a growth of 0.2 per cent year-on-year (y-o-y). This was the first positive growth recorded after the COVID-19 outbreak, led by motor vehicles which advanced by 17.1 per cent," he added.

The current economic performance is also reflected by the higher manufacturing sales in September 2020 which grew 3.7 per cent y-o-y to RM121.2 billion.

The rise in sales value was driven by the increase in transport equipment and other manufactured products (14.3 per cent), food, beverages and tobacco products (14.2 per cent), and electrical and electronics products (7.2 per cent). - Bernama

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