LI registers negative 0.5% in February on manufacturing, services slowdown

by FAYYADH JAAFAR / pic by MUHD AMIN NAHARUL

MALAYSIA’S leading index (LI), which measures the future direction of the country’s economy, registered a negative 0.5% in February this year. This was due to the slowdown in the manufacturing and services sectors.

The Department of Statistics Malaysia (DoSM) said yesterday that LI was a predictive tool used to anticipate economic upturns and downturns on an average of four to six months ahead.

In its report, Malaysian Economic Indicators: Leading, Coincident, and Lagging Indexes for February 2022, the department said the annual LI showed a slower performance at a negative 0.5% in February, signifying the near-term growth momentum would be at ease amid the economy’s recovery.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the annual LI increased to 110.8 points in February from the 110.2 points recorded in January, mainly determined by the significant contributions from real imports of other basic precious and non-ferrous metals (0.6%), real imports of semi conductors (0.4%) and the Bursa Malaysia Industrial Index (0.2%).

“This was influenced by cautious investor sentiment on stock markets, which was reflected by the down trend of the Bursa Malaysia Industrial Index, backed by the Healthcare Index and Utilities Index during the month,” he added.

The smooth growth rate of LI was consistent above the trend, indicating the Malaysian economy was bound to continue its journey to recovery, although the growth momentum would be at ease in the near term.

DoSM stated that the international crises that are currently exerting additional pressure on global economic growth through trade, inflation and financial markets could disrupt Malaysia’s growth prospects.

Regarding the current economic perspective, the Co-Incident Index sustained its growth by expanding 6.4% in February, as opposed to 113.2 points during the same month of the previous year.