Nation continues to display signs of healthy growth

January’s CPI decline is actively induced by govt’s pro-consumer policy of stabilising petrol prices

By FARA AISYAH / Pic By ISMAIL CHE RUS 

The healthy January 2019 domestic demand expansion further proves that the 0.7% year-on-year (YoY) decline in Consumer Price Index (CPI) in the same month was not caused by weakened demand, according to Finance Minister Lim Guan Eng (picture).

“As clarified earlier, the January CPI decline was actively induced by the government’s pro-consumer policy of stabilising petrol prices that immediately passes savings from falling prices directly to consumers, while protecting them from high prices through the imposition of a petrol price ceiling, and replacing the Goods and Services Tax with the Sales and Services Tax,” he said in a statement yesterday.

The data published by the Department of Statistics Malaysia on Monday showed that the country’s exports for January 2019 grew 3.1% year-on-year (YoY) to RM85.4 billion.

The export value for the month was the highest in Malaysian history, surpassing the previous record of RM82.8 billion achieved in January 2018.

Total imports for the month also increased 1% YoY to RM73.9 billion, which shows that the domestic economy is expanding, refuting deflationary concerns raised by some analysts.

In addition, Malaysia’s trade surplus rose by 19.2% YoY to RM11.5 billion in the same month, which is above market estimates of RM9 billion despite the unresolved trade war between China and the US.

“The strong trade surplus is a good start for the year and lends credence to the expectation that Malaysia’s current account will remain in surplus, and keep the domestic economy resilient amid global uncertainty,” Lim added.

Export expansion in January 2019 was driven mainly by growth in the manufacturing and mining sectors. Exports of manufactured goods recorded a YoY growth of 2.9% and mining goods posted a double- digit growth of 23.5%. Meanwhile, exports of agriculture goods contracted by 13.6%.

In January 2019, exports of manufactured goods were valued at RM70.25 billion, accounting for an 82.3% share of Malaysia’s total exports.

Main contributors to the increase in exports were electrical and electronics products, which increased by 8.2%, followed by chemicals and chemical products (16.7%), jewellery (90.8%), optical and scientific equipment (7.1%), textiles, apparels and footwear (10.7%), and wood products (5.6%).

Exports of mining goods totalled RM8.96 billion and constituted 10.5% of Malaysia’s total exports. Expansion in exports was contributed mainly by growth in liquefied natural gas.

Exports of agriculture goods amounted to RM5.62 billion and accounted for 6.6% of total exports. Contraction in exports was mainly due to the decline in exports of palm oil and palm oil-based agriculture products, particularly in palm oil. Exports of palm oil declined by 16.6% to RM3.27 billion, due to lower average unit value.