KUALA LUMPUR, Feb 28 — Malaysia’s near-term growth momentum is anticipated to strengthen as the leading index (LI) grew by 2.1 per cent year-on-year (y-o-y) in December 2021 (November 2021: 1.6 per cent y-o-y), the highest rate since May 2021, MIDF Research said.
The continued improvement was mainly buoyed by the increment in the number of housing units approved, the research house said.
LI provides an early signal on the direction the economy is going.
“Compared to the previous month, the LI rose further although at a slower pace of 0.6 per cent month-on-month (m-o-m) after gaining 1.6 per cent m-o-m in November 2021.
“On the other hand, the coincident index (CI) which measures the overall economic performance, eased to 2.2 per cent y-o-y (November 2021: 3 per cent y-o-y), in view of the recent resurgence in Omicron-led Covid-19 infections,” it said in a note today.
The Department of Statistics last week released the country’s LI performance, which remained positive in December 2021, rising by 2.1 per cent to 111.5 points from 109.2 points a year ago.
This indicates a more sanguine economic outlook in the months ahead despite the surge in Covid-19 cases, it said.
On a monthly basis, the CI dropped by 0.3 per cent m-o-m after gaining 0.9 per cent m-o-m in the prior month, registering a contraction for the first time since July 2021 amid a decline in capacity utilisation in the manufacturing sector.
“In spite of the latest record-breaking daily local Covid-19 cases, we anticipate the increased number of vaccination, including the booster, shots will prompt the authorities to not reimpose any stringent restrictions which would derail the economic recovery process.
“However, the Ukraine invasion poses a downside risk of a prolonged supply bottleneck which could affect Malaysia’s export performance and manufacturing outlook,” MIDF said. — Bernama
