DoSM: Malaysian economy to start moderating going into 2023

LI rose 0.4% to 109.6 points in October 2022 versus 109.2 points in the same month last year 

THE Malaysian economy is expected to start moderating in the months ahead in 2023, impacted by global economic uncertainty, said the Department of Statistics Malaysia (DoSM). 

Looking at the smoothed long-term trend in October 2022, the Leading Index (LI) started trending below the 100 points mark, the department said in a statement last Friday. 

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said that Malaysia’s LI rose 0.4% to 109.6 points in October 2022 versus 109.2 points in the same month last year, a rise of 0.4 index points. 

“This increase was supported by the number of housing units approved and real imports of other basic precious and non-ferrous metals,” the statement said. 

However, on a monthly basis, the LI recorded a negative 0.3% in October 2022 against a negative 1.3% in September 2022, the statement said. 

This trend was driven by the Bursa Malaysia Industrial Index (0.6%), real imports of semiconductors (0.3%), real money supply M1 (0.1%) and expected sales value for manufacturing (0.1%). 

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

Mohd Uzir says 4 states recorded increases above the national inflation level of 4%, namely Putrajaya , Selangor, Sarawak and Johor (pic: BERNAMA)

“As for the current economic position, the Coincident Index (CI) recorded an increase of 6.5% year-on-year to 120.5 points in October 2022 (October 2021: 113.1 points). 

“On the other hand, the monthly change in CI recorded a decrease of 0.6 caused by the decrease in the Industrial Production Index (-0.4%), capacity utilisation for manufacturing (-0.3%) and real contributions of the Employees Provident Fund -0.1%),” the statement said.

The CI measures current economic activities and is often analysed with leading and lagging indexes.

Meanwhile, Malaysia’s inflation rate stood at 4% in November 2022, unchanged from the preceding month, said the DoSM. 

The department said the Consumer Price Index (CPI) for November 2022 stood at 129 compared to 124 in November 2021. 

Mohd Uzir said inflation for the food group increased by 7.3% and remained the main contributor to this month’s inflation, while restaurants and hotels edged up to 7% from 6.8% in October 2022. 

“Slower increase was recorded for the transport group (5%) and furnishings, household equipment and routine household maintenance (3.8%),” he added. 

DoSM said other main groups which also recorded increases were recreation services and culture (3.6%), miscellaneous goods and services (2.6%) and education (1.5%). 

In the meantime, housing, water, electricity, gas and other fuels and health groups recorded an increase of 1.4%, respectively, while alcoholic beverages and tobacco, as well as clothing and footwear, inclined 0.8% and 0.4%, respectively, against November 2021, it said. 

“Core inflation registered an increase of 4.2% in November 2022 compared to the same month of the previous year, with the highest increase recorded by the food and non-alcoholic beverages group with 8.2%,” it said. 

Mohd Uzir said the inflation for the January to November 2022 period increased 3.4% compared to 2.3% for the same period in 2021, mainly attributed to food and non-alcoholic beverages (5.6%), transport (4.7%), as well as restaurants and hotels (4.7%). 

He noted that the inflation rate for month-on-month in November 2022 inclined 0.3% compared to 0.2% recorded in October 2022, mainly contributed by the food and non-alcoholic beverages (0.7%) and restaurants and hotels (0.5%). 

Meanwhile, health and miscellaneous goods and services groups increased by 0.3%, respectively. 

Mohd Uzir said four states recorded increases above the national inflation level of 4%, namely Putrajaya (7.9%), Selangor (4.8%), Sarawak (4.7%) and Johor (4.2%), while Labuan recorded the lowest increase at 2.4%. 

“Inflation for the income group below RM3,000 increased 3.9% from 124.7 in November 2021 to 129.6 in November 2022, contributed by the food and non-alcoholic beverages group at 6.9%,” he added. — Bernama / pic MUHD AMIN NAHARUL

  • This article first appeared in The Malaysian Reserve weekly print edition