Economic indicators show recovery but impact of pandemic weighs

KUALA LUMPUR: The Statistics Department anticipates a favourable economic performance, based on the positive April leading index (LI), but the strength of the recovery will hinge on the impact and extent of the Covid-19 pandemic.

Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the LI in April registered double-digit growth of 15.7%, nudging the index to 111.8 points, after a 17.2% surge in March (113.2 points).

“The improvement was supported by positive contributions of all LI components and influenced primarily by the low base effect from the previous year (April 2020: 96.6 points).

“Meanwhile, the LI decreased by 1.2% on-month, ” he said.

The LI is a predictive tool used to anticipate economic upturns and downturns in an average of four to six months ahead.

Mohd Uzir said the growth rate of the smoothed LI, which is used to predict the direction of economic movements in the near future, remained positive.

“The LI anticipates favourable economic performance if pandemic eases, ” he said.

The short-term outlook is in line with the strengthening of global demand in which some countries have relaxed their economies besides the success of herd immunity and effective roll out of National Recovery Plan to accelerate the country's economic recovery.

The Coincident Index (CI) rose by 0.8% to reach 115.4 points in April 2021 from 114.5 points in the previous month supported by significant increases in capacity utilisation in the manufacturing sector (0.9%) and volume index of retail trade (0.6%).

The CI, which reflects the current state of the economy, jumped to record an annual growth of 20.3% in April from 4.1% in March.

The country is under a lockdown since June 1 and this will continue until June 28 due to the surge in Covid-19 infections.

The government is set to decide soon if the lockdown will continue beyond the four weeks. But this will depend on the infections, where it had set a limit of 4, 000 new cases a day before moving on to phase two.

As at 1pm on Friday, there were 5, 812 fresh cases, with Selangor accounting for 2, 187.

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