KUALA LUMPUR: Malaysia’s economic outlook has improved, with the Statistics Department describing March indicators as encouraging in the near term, but it expects prevailing challenges to continue to persist until the Covid-19 pandemic is brought under control.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said on Tuesday Malaysia’s leading index (LI) in March showed a significant increase with a double-digit growth, which was a 17.3% year-on-year increase to 113.3 points from 96.6 points in March 2020.
“This is an inaugural highest annual growth recorded following a significant economic contraction in March 2020 due to the containment of outbreak.
“Besides that, the performance of LI was influenced by strong growth in number of housing units approved, real imports of other basic precious & other non-ferrous metals and number of new companies registered, ” he said.
Mohd Uzir said when compared with the previous month, the LI observed a similar trend by registering 1.8% in March versus 1.1% in February.
Underpinning this growth was mainly real imports of other basic precious & other non-ferrous metals (0.8%) and number of housing units approved (0.6%).
“In March 2021, the LI which indicates the ability in anticipating the economic direction in advance pointed a better economic prospect through the movement of growth rate of smoothed LI, ” he said.
The report issued on Tuesday contained the economic indicators LI, coincident and lagging indexes for March. The LI is a predictive tool used to anticipate economic upturns and downturns in an average of four to six months ahead.
Despite expecting uncertainty continuing to persist, the Statistics Department was upbeat on the economic outlook in the near future.
This was underpinned by the anticipated promising signs of Malaysia’s merchandise trade performance as well as positive sentiment in manufacturing sector, motor vehicles sub-sector and commodity prices.
“Given the global economic recovery in sight, better economic performances were seen in most countries in the first quarter of 2021.
“China being the Malaysia’s top trading partner experienced a sturdy growth of Gross Domestic Product with 18.3% for the same period, ” it said.
Meanwhile, the Coincident Index (CI) which measures the current economic performance showed a better year-on-year growth to 4.1% from negative 2% in February 2021.
On a monthly basis, the CI rose to 0.1% supported by the increase in real contributions to the Employees Provident Fund (1.4%), total employment in the manufacturing sector (0.5%) and capacity utilization in the manufacturing sector (0.2%).
Malaysia has registered record high deaths and infections from the Covid-19 in recent days, prompting the government to reinstate a Movement Control Order (MCO 3.0) nationwide from May 12 to June 7.
With tighter standard operating procedures (SOPs) enforced under the one-month MCO 3.0, this could lower GDP growth to about 5% to 6.5% for 2021 from the 6% to 7.5% target forecast by Bank Negara Malaysia earlier.
During MCO 1.0 (March 18 to May 3,2020), Malaysia lost about RM2.4bil daily, while MCO 2.0 (Jan 13 to Feb 18,2021) cost the country an estimated RM300mil to RM400mil a day.