Slower economic growth anticipated in the coming months

Statistics Dept says among 7 Leading Index components, only 2 posted increases

By NUR HAZIQAH A MALEK / Pic By MUHD AMIN NAHARUL

THERE will be slower economic growth in the coming months as the Leading Index (LI) year-on-year (YoY) change posted a slower growth of 0.7% for January 2020 compared to 1.9% recorded in the previous month.

The Department Statistics of Malaysia chief statistician Datuk Seri Dr Mohd Uzir Mahidin (picture) said the slower growth is due to the index for the month not taking into account the internal shocks that have a direct impact on the economy since the Covid-19 pandemic struck.

“These pandemic effects are expected to be reflected in the index of subsequent month. LI increased 0.1% month-on-month (MoM) in January 2020 from a negative 0.3% in the previous month.

“Among seven components of LI, two posted rises namely expected sales value in manufacturing sector at 0.5% and Bursa Malaysia Industrial Index at 0.1%,” he said.

He added that the Coincident Index (CI), which measures the overall current economic performance, has remained virtually unchanged at 0.2% in January 2020 against December 2019.

“Total employment in the manufacturing sector being at 0.2% was the main contributor to the increase, however, the CI showed a lower annual growth rate at 2% in January 2020 compared to 2.4% recorded in the previous month,” he said.

In addition, the Consumer Price Index (CPI) increased 1.3% in February 2020 to 122.4 against 120.8 in the same month of the previous year.

Mohd Uzir said the increase in the overall index was driven by the index of miscellaneous goods and services, transport, housing, water, electricity, gas and other fuels, as well as communication.

“On a monthly basis, CPI remained unchanged against January 2020. Meanwhile, the CPI for the period of two months between January and February 2020 registered an increase of 1.4% compared to the same period last year,” he said.

As for subgroups, the index for food and non-alcoholic beverages increased by 0.8% YoY in the month under review, which could be attributed to the subgroup of vegetables, food products not elsewhere classified, and rice, bread and other cereals.

“Among the index of goods which recorded price increases in most states were small onion, garlic and big onion.

“The index for food away from home also increased 1.6% YoY in February 2020, which was contributed by the increase in price of nasi lemak, rice with side dishes and fried rice,” he said.

States-wise, Mohd Uzir said four states namely Selangor, Pahang, Johor and Federal Territories (Putrajaya and Kuala Lumpur) all surpassed the national CPI rate of 1.3%, versus last year.

“All states except Melaka registered an increase in the index of food and non-alcoholic beverages.

“The highest increase was recorded by Johor followed by Selangor, Putrajaya, Pulau Pinang and Perak, and it surpassed the national index of 0.8% for food and non-alcoholic beverages in February 2020,” he said.

He added that the core index rose 1.3% in February 2020 versus the same month in the previous year.

“Among the major groups which influenced the increase were miscellaneous goods and services, housing, water, electricity, gas and other fuels, communication, education and health,” he said.