KUALA LUMPUR (May 25): Malaysia’s Department of Statistics (DOSM) said the country’s leading index (LI) improved significantly in March 2021, increasing 17.3% year-on-year. other (year-on-year) to 113.3 points against 96.6 points in March 2020.
This increase was the highest annual growth on record, given the sharp economic contraction in March 2020 amid the application of the First Order of Movement Control (MCO) in a bid to contain the Covid epidemic. 19.
Chief statistician Datuk Seri, Dr Mohd Uzir Mahidin, said the index’s growth was supported by strong growth in the number of approved housing units, actual imports of other precious base metals and other non-ferrous metals and the number of new businesses registered.
On a month-to-month basis (mom), the LOI rose 1.8% in March, up from 1.1% growth the month before.
“The LI, which indicates the ability to anticipate the economic direction in advance, pointed to better economic prospects through the movement of the growth rate of a smoothed LI,” Mohd Uzir said at a press conference virtual earlier in the day.
He added that while uncertainty persists, the short-term economic outlook is encouraging, in line with optimism regarding the performance of Malaysia’s merchandise trade as well as the positive performance of the manufacturing sector, automotive sub-sector and commodity prices.
He pointed out that China, Malaysia’s largest trading partner, also recorded strong gross domestic product (GDP) growth of 18.3% in the first quarter of 2021 (1Q21), which may bode well for Malaysia. .
The Coincident Index (CI), which measures current economic performance, showed better year-over-year growth of 4.1% vs. -2% in February 2021, and rose 0.1% mom, supported by an increase real contributions to the Employee Provident Fund (1.4%), total employment in the manufacturing sector (+ 0.5%) and capacity utilization in the manufacturing sector (+ 0.2%).
Prime Minister’s Department (Economy) Minister Datuk Seri Mustapa Mohamed said LI’s positive performance was in line with the 6% GDP growth recorded in March.
“If the government decides on a full lockdown from May 25 to June 7, 2021, like what happened during MCO 1.0, the dynamics of economic growth will be affected. The government expects its 2021 economic growth forecast of between 6% and 7.5% to be reached if the health crisis stabilizes after the end of the current MCO 3.0 ”, declared the Minister.
He added that a total foreclosure would lead to an increase in the unemployment rate and an increase in the number of low-income households, while business performance would be negatively affected.
At the same time, following engagements with representatives of industry, micro and small and medium enterprises (SMEs), as well as hawker associations on Saturday and Sunday, Mustapa said the majority of They agreed with the government’s decision to apply MCO 3.0.
However, he noted that the current LI was based on data collected up to March 2021, and that a study will be conducted by the tax department and SME Corp to assess the impact of MCO 3.0 on SMEs, which will provide guidance on the impact of the current AGC.
Mohd Uzir said the country has learned several lessons since MCO 1.0 and stressed that economic sectors are allowed to operate under MCO 3.0.
“We expect this to continue to boost economic momentum. We can’t suddenly stop the momentum [with a total lockdown]. We believe that the economy has the potential to work its way towards recovery, ”he said.