Malaysia’s economic outlook dims as leading index declines, amidst challenging times, says DOSM

The Department of Statistics, Malaysia (DOSM) said Malaysia’s economic prospect remains unfavourable due to the decline in the countries’ leading index (LI), which serves as a crucial indicator of economic health and stability.

It said that the LI for Malaysia decreased by 2.7% in April 2023 compared to the previous year, remaining below the long-term trend for the seventh consecutive month.

“This indicates Malaysia’s challenging economic outlook in the near term coupled with the current global economic uncertainties,” it said.

The DOSM released its Malaysian Economic Statistics Review today which provides insights into the country’s economic performance in April 2023.

The report reveals mixed results across various sectors, but the overall message from DOSM is that Malaysia’s economic prospects remain unfavourable.

The Index of Industrial Production (IPI) in Malaysia experienced a decline of 3.3% in April 2023 compared to the previous month. This decrease was driven by contractions in all sectors, including mining, manufacturing, and electricity. The sales value of the manufacturing sector also saw a decline of 2% in April 2023, primarily influenced by sub-sectors such as food, beverages & tobacco, transport equipment & other manufacturers, and petroleum, chemical, rubber, & plastics.

On a positive note, Malaysia’s wholesale & retail trade recorded a year-on-year growth of 6.3% in April 2023, with contributions from both retail trade and wholesale trade. In terms of volume index, wholesale & retail trade registered a 4.7% year-on-year increase. However, the performance of the producer price index (PPI) declined by 3% in April 2023, mainly driven by decreases in the agriculture, forestry & fishing, and mining sectors.

Malaysia’s total trade decreased by 14.5% in April 2023 compared to the same period the previous year. Both exports and imports declined, resulting in a significant decrease in the trade surplus. The negative growth in trade continued in May 2023, although at a better rate, with a 2% decrease in total trade. Exports saw a slight decline of 0.7%, while imports decreased by 3.3%. However, the trade surplus grew by 21.4% compared to the previous year.

In terms of the labour force, the number of employed persons in April 2023 increased by 2.5% compared to the same period the previous year, reaching 16.25 million persons. The employment-to-population ratio remained at 67.5%, indicating the ability of the economy to create employment. The unemployment rate in April was reported at 3.5%.

In conclusion, DOSM acknowledges that the Malaysian economy faces both challenges and opportunities.

While international trade and industrial production have declined, there are positive developments in employment and consistent growth in specific sectors that provide optimism for the future. — TMR

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