Thursday September 12 2019
Malaysia Holds Key Interest Rate at 3%
Bank Negara Malaysia | Joana Ferreira | joana.ferreira@tradingeconomics.com

Bank Negara Malaysia held its overnight policy rate at 3 percent during its September meeting, saying growth will continue to be supported by resilient private spending, alongside stable labour market and wage growth. Meanwhile, inflation is expected to remain low.

Bank Negara Malaysia's monetary policy statement:

The global economy is expanding at a more modest pace amid slower growth in most major advanced and emerging economies. The recent escalation of trade tensions point to weaker global trade going forward, with increasing signs of spillovers to domestic economic activity in a number of countries. Monetary policy easing in several major economies has eased global financial conditions, but uncertainty from the prolonged trade disputes and geopolitical developments could lead to excessive financial market volatility.    
 
For Malaysia, the stronger economic growth performance in the second quarter of 2019 was underpinned by the resilience of private spending amid broad-based expansion in key economic sectors. Going forward, these domestic drivers of growth, alongside stable labour market and wage growth, are expected to remain supportive of economic activity. On the external front, Malaysia’s diversified exports will partly mitigate the impact of softening global demand. Overall, the baseline growth projection for 2019 remains unchanged, within the range of 4.3% - 4.8%. This projection, however, is subject to further downside risks from worsening trade tensions, uncertainties in the global and domestic environment, and extended weakness in commodity-related sectors.

Average headline inflation year-to-date is 0.3%. Headline inflation is projected to average higher for the remaining months of the year and into 2020.  However, headline inflation is expected to remain low. This reflects the lapse in the impact of consumption tax policy changes, the relatively subdued outlook on global oil prices, and policy measures in place to contain food prices. The trajectory of headline inflation will, however, be dependent on global oil and commodity price developments. Underlying inflation is expected to remain stable, supported by the continued expansion in economic activity and in the absence of strong demand pressures.
 
At the current level of the OPR, the stance of monetary policy remains accommodative and supportive of economic activity. The MPC will continue to assess the balance of risks to domestic growth and inflation, to ensure that the monetary policy stance remains conducive to sustainable growth amid price stability.




Wednesday September 04 2019
Malaysia Posts Largest Trade Surplus in 4 Months
Department of Statistics, Malaysia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's trade surplus increased sharply to MYR 14.3 billion in July of 2019 from MYR 8.3 billion in the same month of the prior year and easily beating market expectations of a MYR 10.7 billion surplus. This was the largest trade surplus since March, as exports rose while imports fell.

Year-on-year, exports unexpectedly increased by 1.7 percent year-on-year to MYR 88.0 billion in July 2019, missing market consensus of a 2.5 percent drop and after a 3.1 percent fall in the previous month. Sales rose for: electrical & electronic products (4.5 percent); timber & timber based products (1.2 percent); liquefied natural gas/LNG (31.3 percent); refined petroleum products (3.2 percent); natural rubber (25.5 percent). Conversely, outbound shipments declined for: crude petroleum (-45.7 percent); palm oil & palm oil-based products (-9.9 percent).
 
Among major trading partners, sales increased to China (3.8 percent), led by LNG and refined petroleum product; Singapore (3.1 percent), driven by electrical and electronic products; and the US (7.9 percent).

Imports declined by 5.9 percent year-on-year to MYR 73.7 billion in July 2019, better than market expectations of a 7 percent drop and compared to a 9.2 percent fall in the previous month. This marked the second straight month yearly drop in inbound shipments, as purchases shrank for all categories. Imports of capital goods tumbled 13.9 percent, due to decline in both capital goods except transport equipment (-6.3%) and transport equipment, industrial (-58.8%). Also, purchases of intermediate goods decreased by 3.4 percent, mainly attributed to industrial supplies, processed (-8.9%) and parts and accessories of capital goods (-19.6%). In addition, imports of consumption goods contracted 5.0 percent, driven by semi-durables (-18.9%) and durables (-17.9%).

By country, purchases dropped from the EU countries (-10.0 percent), the ASEAN countries (-10.7 percent). Meanwhile, imports from China fell by 2.8 percent, mainly due to electrical & electronic/E&E products. Also, imports from Singapore slumped 20.2 percent, led by E & E products.
 
Considering the first seven months of the year, the country's trade balance recorded a surplus of USD 81.5 billion, compared with a surplus of USD 68.8 billion in the same period 2018.

Malaysia’s total trade is projected to grow moderately by 5 percent in 2019 from 5.9 percent in 2018 due to uncertainties in the global market. 
 
 
 
 





Friday August 16 2019
Malaysia Q2 GDP Growth Strongest in Over a Year
Department of Statistics, Malaysia | Chusnul Ch Manan| chusnul@tradingeconomics.com

Malaysia's economy expanded 4.9 percent year-on-year in the second quarter of 2019, following a 4.5 percent growth in the previous three-month period and beating market expectations of 4.8 percent.

Private expenditure went up by 7.8 percent in the second quarter, following a 7.6 percent gain in the previous period; and net external demand contributed positively to the GDP as exports increased 0.1 percent while imports fell 2.1 percent. On the other hand, government spending growth slowed sharply (0.3 percent vs 6.3 percent in Q1), while gross fixed capital formation continued to contract (-0.6 percent vs -3.5 percent).

On the production side, mining & quarrying activity rebounded (2.9 percent vs -2.1 percent), driven mainly by the recovery in natural gas output. In addition, output expanded at a faster pace for manufacturing (4.3 percent vs 4.2 percent), supported by better performance of the domestic-oriented industries; and construction (0.5 percent vs 0.3 percent). Meanwhile, growth slowed for both services (6.1 percent vs 6.4 percent) and agricultural sectors (4.2 percent vs 5.6 percent).

On a quarter-on-quarter seasonally-adjusted basis, the GDP grew by 1.0 percent in the second quarter, following a 1.1 percent expansion in the previous period.

Considering the first half of the year, the economy grew 4.7 percent compared with the same period of 2018. For 2019, the GDP growth is forecast to come in within the central bank's 4.3-4.8 percent target range, driven mainly by domestic demand while an escalation in global trade tensions could weigh on external demand.




Wednesday August 14 2019
Malaysia Inflation Rate Eases to 1.4% in July
Department of Statistics, Malaysia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Malaysia's annual inflation rate edged down to 1.4 percent in July 2019 from a 13-month high of 1.5 percent in the previous month and below market expectations of 1.5 percent. Housing & utilities inflation slowed while transport prices continued to drop.

Prices increased softer for both housing, water, electricity, gas, & other fuels (1.9 percent vs 2.3 percent in June) and recreation services & culture (2.4 percent vs 2.7 percent). Meantime, inflation was steady for education (at 1.4 percent) and communication (at 2.1 percent). In addition, cost continued to decline for transport (-1.9 percent vs -2.1 percent) and clothing and footwear (-1.1 percent vs -0.7 percent).

On the other hand, food & non-alcoholic beverages increased by 2.4 percent year-on-year in July, compared to a 2.3 percent rise in June, boosted by higher costs of: milk & eggs (2.6 percent vs 2.5 percent in June); fruits (2.5 percent vs 1.1 percent); food away from home (4.4 percent vs 4.2 percent). On the other hand, cost rose slower for: fish & seafood (0.4 percent vs 0.5 percent); vegetables (4.7 percent vs 5.2 percent); rice, bread & other cereals (0.7 percent vs 0.8 percent); while food products inflation was steady (at 1.5 percent). Meanwhile, deflation eased for meat (-1.6 percent vs -1.8 percent); oils & fats (-0.2 percent vs -0.3 percent); and sugar, jam, honey (-0.1 percent vs -0.4 percent).

Also, upward pressure came from: restaurants and hotels (1.7 percent vs 1.6 percent); furnishing, household equipment & routine maintenance (3.3 percent vs 3.1 percent); alcoholic beverages & tobacco (2.3 percent vs 2.1 percent); miscellaneous goods & services (1.8 percent vs 1.4 percent) and health (1.3 percent vs 1.2 percent).

Core consumer prices, which exclude most volatile items of fresh food as well as administered prices of goods and services, rose 2.0 percent in July, the most since January last year and compared to a 1.9 percent gain in June.

On a monthly basis, consumer prices inched up 0.1 percent in July, following a flat reading in June.





Friday August 02 2019
Malaysia Trade Surplus Widens in June
Department of Statistics, Malaysia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's trade surplus increased sharply to MYR 10.3 billion in June of 2019 from MYR 6 billion in the same month of the prior year and above market expectations of a MYR 8.4 billion surplus. Exports fell 3.1 percent while imports dropped at a faster 9.2 percent.

Year-on-year, exports fell by 3.1 percent to MYR 76.2 billion in June 2019, missing market consensus of a 1.8 percent gain and after a 2.5 percent rise in the previous month. This was the first decline in exports since April, as sales decreased for both electrical & electronic products (-6.0 percent) and timber & timber based products (-17.6 percent). By contrast, outbound shipments increased for: crude petroleum (31.7 percent); palm oil & palm oil-based products (2.2 percent); natural rubber (10.7 percent); refined petroleum products (8.4 percent), and liquefied natural gas products (5.5 percent).
 
Outbound shipments went down to China (-12.0 percent), led by electrical and electronic products; Singapore (-0.9 percent), amid slower demand of electrical and electronic products. By contrast, exports to the US rose by 8.8 percent.

Imports to Malaysia dropped by 9.2 percent year-on-year to MYR 65.9 billion in June 2019, after a 1.4 percent gain in May and missing market expectations of a 1.1 percent rise. This was the first decline in imports in three months, as imports fell for all categories: capital, intermediate, and consumption goods. Purchases of intermediate goods decreased (-2.5 percent), due to a fall in industrial supplies, processed (-11.3 percent). Meantime, increases were reported for fuel & lubricants, processed, other (20.5 percent), and industrial supplies, primary (27.2 percent). Also, inbound shipments of consumption goods went down 5.4 percent, led by semi-durables (-19.6 percent), and durables (-13.8 percent). Meantime, imports of capital goods fell 23.6 percent, attributed to capital good except transport equipment (-20.2 percent); transport equipment industrial (-44.6 percent).
 
By country, purchases dropped from: the EU countries (-7.2 percent); the ASEAN countries (-11.9 percent). Meanwhile, imports from China tumbled by 12.6 percent, mainly due to electrical & electronic/E&E products. Also, imports from Singapore slumped 14.3 percent, led by E & E products.  
 
Considering the first half of the year, the trade balance recorded a surplus of USD 67.2 billion, compared with a surplus of USD 60.5 billion in the same period of 2018. 

Malaysia’s total trade is projected to grow moderately by 5 percent in 2019 from 5.9 percent in 2018 due to uncertainties in the global market. 





Wednesday July 24 2019
Malaysia Inflation Rate Rises to 13-Month High
DOSM | Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's annual inflation rate rose to 1.5 percent in June 2019 from 0.2 percent in the previous month and compared to market expectations of 1.6 percent. That was the highest rate since May 2018, as the effects of tax policy changes introduced last year faded.

Prices of food & non-alcoholic beverages increased by 2.3 percent year-on-year in June, the most since April last year and compared to a 1.2 percent rise in May, boosted by higher costs of: vegetables (5.2 percent vs 4.5 percent); milk & eggs (2.5 percent vs 0.7 percent in May); fruits (1.1 percent vs -0.1 percent); food away from home (4.2 percent vs 2.9 percent); fish & seafood (0.5 percent vs 0.9 percent); rice, bread & other cereals (0.8 percent vs -0.3 percent); and food products (1.5 percent vs -0.8 percent). Meantime, deflation eased for meat (-1.8 percent vs -3.1 percent); oils & fats (-0.3 percent vs -1.2 percent); and sugar, jam, honey (-0.4 percent vs -2.2 percent).

Also, upward pressure came from: housing, water, electricity, gas, & other fuels (2.3 percent vs 1.8 percent); restaurants and hotels (1.6 percent vs 0.6 percent); education (1.4 percent vs 1.2 percent); furnishing, household equipment & routine maintenance (3.1 percent vs 0.5 percent); alcoholic beverages & tobacco (2.1 percent vs 1.3 percent); miscellaneous goods & services (1.4 percent vs -2.1 percent); health (1.2 percent vs -0.3 percent); recreation services & culture (2.7 percent vs -0.4 percent); and communication (2.1 percent vs -0.9 percent).

On the other hand, cost continued to decline for transport (-2.1 percent vs -2.5 percent) and clothing and footwear (-0.7 percent vs -3.2 percent).

Core consumer prices, which exclude most volatile items of fresh food as well as administered prices of goods and services, rose 1.9 percent in June, the most since January last year and compared to a 0.4 percent gain in May.

On a monthly basis, consumer prices were flat in June, following a 0.2 percent rise in May.


Tuesday July 09 2019
Malaysia Leaves Monetary Policy Unchanged
Central Bank of Malaysia l Stefanie Moya | stefanie.moya@tradingeconomics.com

The Central Bank of Malaysia left its benchmark interest rate steady at 3 percent on July 9th 2019, after trimming it by 25 bps in the previous meeting, as widely expected. Policymakers said that the stance of monetary policy remains accommodative and supportive of economic activity. The Committee added that they will continue to assess the balance of risks to domestic growth and inflation, to ensure that the monetary policy stance remains conducive to sustainable growth amid price stability.

Statement by the Bank Negara Malaysia:

The Malaysian economy grew within expectations in the first quarter of the year, supported by both domestic and external factors. Looking ahead, while the external sector performance is likely to be weighed down by slower global growth and trade tensions, economic growth will be supported by domestic demand. Household and capital spending will continue to be driven by stable labour market conditions and capacity expansion in key sectors such as manufacturing and services. The baseline projection remains within the range of 4.3% - 4.8%. This projection, however, is subject to downside risks from ongoing uncertainties in the global and domestic environment, worsening trade tensions and extended weakness in commodity-related sectors.

While headline inflation has remained low in the recent period, it is projected to rise in the coming months as the impact of the changes in consumption tax policy lapses. For 2019 as a whole, average headline inflation is expected to be broadly stable compared to 2018. The trajectory of headline inflation will be dependent on global oil prices and policy measures such as the timing of the lifting of the price ceiling on domestic retail fuel prices. Underlying inflation is expected to remain stable, supported by the continued expansion in economic activity and in the absence of strong demand pressures.


Thursday July 04 2019
Malaysia Trade Surplus Above Estimates in May
Department of Statistics, Malaysia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's trade surplus increased to MYR 9.1 billion in May of 2019 from MYR 8.12 billion in the same month of the prior year and above market expectations of a MYR 8.2 billion surplus. Exports went up 2.5 percent while imports rose at a softer 1.4 percent.

Year-on-year, exports increased by 2.5 percent to MYR 84.1 billion in May 2019, below market consensus of a 3.6 percent gain and after a 1.1 percent rise in the previous month. Sales rose for: electrical and electronic products/E&E (0.5 percent); palm oil and palm oil-based products (7.6 percent); timber and timber based products (15.0 percent); natural rubber (5.3 percent). By contrast, outbound shipments declined for: crude petroleum (-20.0 percent); refined petroleum products (-15.5 percent), and liquefied natural gas products (-5.2 percent).
 
Outbound shipments went up to the US 911.7 percent); Singapore (2.6 percent) amid faster demand of refined petroleum products. By contrast, export to China decreased by 2.2 percent, led by E & E products.

Imports to Malaysia increased by 1.4 percent year-on-year to MYR 75.1 billion in May 2019, after a 4.4 percent gain in April and below market expectations of a 2.6 percent rise. This was the second straight month increase in imports, as imports rose for both intermediate and consumption goods. Purchases of intermediate goods increased (6.4 percent), due to rises in industrial supplies, processed (16.1 percent), fuel & lubricants, processed, other (38.8 percent), and part and accessories of transport equipment (28.8 percent). Also, inbound shipments of consumption goods grew 10.9 percent, led by food and beverages, processed mainly for household consumption (19.2 percent), non-durable (13.2 percent), and durable (12.3 percent) Meantime, imports of capital goods fell 5.9 percent, attributed to  transport equipment industrial (-60.1 percent).
 
By country, purchases went up from both the EU countries (6.2 percent) and the ASEAN countries (4.4 percent), while declined from China (-2.1 percent), mainly due to refined petroleum products and electrical & electronic/E&E products. Also, imports from Singapore fell 5.8 percent, led by E & E products.  
 
Considering the first five months of the year, the trade balance recorded a surplus of USD 56.9 billion, compared with a surplus of USD 54.5 billion in the same period of 2018. 

Malaysia’s total trade is projected to grow moderately by 5 percent in 2019 from 5.9 percent in 2018 due to uncertainties in the global market. 



Wednesday June 26 2019
Malaysia Inflation Rate Steady for 3rd Month at 0.2%
Department of Statistics, Malaysia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's annual inflation rate came in at 0.2 percent in May 2019, unchanged from the previous month and below market consensus of 0.3 percent. Main upward pressure came from both food and housing & utilities prices while transport prices continued to drop, though less.

Year-on-year, prices of food & non-alcoholic beverages increased by 1.2 percent in May, the most since last October, up from a 1.1 percent rise in April. Among food, cost continued to rise for: fish & seafood (0.9 percent vs 0.2 percent in April); milk & eggs (0.7 percent vs 1.9 percent); and food away from home (2.9 percent vs 3.1 percent), with cost of vegetables (4.5 percent vs 2.2 percent). Meantime, prices continued to fall for rice, bread & other cereals (-0.3 percent vs -0.4 percent); meat (-3.1 percent vs -3.6 percent); oils & fats (-1.2 percent vs -1.0 percent); sugar, jam, honey (-2.2 percent vs -2.2 percent); food products (-0.8 percent vs -0.5 percent) while fruits prices edged down (-0.1 percent vs 0.1 percent)

Also, inflation accelerated for both alcoholic beverages & tobacco (1.3 percent vs 1.2 percent) and furnishings, household equipment & routine maintenance (0.5 percent vs 0.2 percent). 

On the other hand, inflation slowed for housing, water, electricity, gas, & other fuels (1.8 percent vs 2 percent); restaurants and hotels (0.6 percent vs 0.8 percent) while it was steady for education (at 1.2 percent). In contrast, cost continued to drop for: transport (-2.5 percent vs -2.6 percent); clothing and footwear (-3.2 percent, the same pace in April); miscellaneous goods & services (-2.1 percent vs -2 percent); health (-0.3 percent, the same pace in the prior month); recreation services & culture (-0.4 percent, the same pace as in the previous month), and communication (-0.9 percent vs -1.1 percent).

Core consumer prices rose 0.4 percent year-on-year in May, the least since February, softer than a 0.5 percent gain in April.

On a monthly basis, consumer prices went up by 0.2 percent in May, following a flat reading in April.



Monday June 03 2019
Malaysia Trade Surplus Smallest in 4 Months
Department of Statistics, Malaysia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's trade surplus decreased to MYR 10.9 billion in April of 2019 from MYR 13 billion in the same month of the prior year and below market expectations of a MYR 12.6 billion surplus. This was the smallest trade gap since December last year, as exports rose less than imports.

Year-on-year, exports unexpectedly rose by 1.1 percent to MYR 85.2 billion in April 2019, missing market consensus of a 1 percent fall and after a 0.5 percent contraction in the previous month. Sales increased for: electrical and electronic products/E&E (38.9 percent to MYR 33.1 billion); refined petroleum products (22.3 percent to MYR 6.4 billion); liquefied natural gas (26.3 percent to MYR 3.6 billion); natural rubber (6.0 percent to MYR 334.9 million). By contrast, outbound shipments declined for: crude petroleum (-34.6 percent to MYR 1.9 billion); palm oil and palm oil-based products (-14.8 percent to MYR 5.2 billion), and timber and timber based products (-3.1 percent to MYR 1.8 billion).
 
Outbound shipments rose to Singapore (11.3 percent) amid faster demand of electrical and electronic products, refined petroleum products and crude petroleum. By contrast, export to China decreased by 6.9 percent, led by E & E products.

Imports to Malaysia unexpectedly increased by 4.4 percent year-on-year to MYR 74.3 billion in April 2019, after a 0.1 percent fall in March and missing market expectations of a 0.2 percent drop. This was the first increase in imports since January, as imports went up for all categories. Purchases of intermediate goods surged (20.3 percent, due to rises in industrial supplies, processed (25.4 percent), fuel & lubricants, primary (60.5 percent), and part and accessories of capital goods except transport equipment (11.4 percent). Also, inbound shipments of consumption goods jumped 18.9 percent, led by non-durable (30.2 percent). Meantime, imports of capital goods grew 5.7 percent, attributed to capital goods except transport equipment (12.5 percent).
 
By country, purchases went up from China (8.8 percent), mainly due to motor cars and other motor vehicles, aluminum, refined petroleum products and electrical & electronic/E&E products; while declined from Singapore (-15.7 percent).
 
Considering the first four months of the year, the trade balance recorded a surplus of USD 47.8 billion, compared with a surplus of USD 46.4 billion in the same period of 2018.

Malaysia’s total trade is projected to grow moderately by 5 percent in 2019 from 5.9 percent in 2018 due to uncertainties in the global market.