Wednesday July 18 2018
Malaysia June Inflation Rate at Near 3-1/2 Year Low of 0.8%
Department of Statistics, Malaysia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's consumer price inflation eased to 0.8 percent year-on-year in June of 2018 from 1.8 percent in the previous month and below market expectations of 1.3 percent. It is the lowest inflation rate since February 2015, as prices were lower mainly for food and housing, following the withdrawal of a goods and services tax on June 1.

Year-on-year, prices rose at a softer pace for: food & non-alcoholic beverages (0.8 percent from 2.2 percent in May); housing, water, electricity, gas, and other fuels (1.5 percent from 2.1 percent); restaurants and hotels (1.3 percent from 2.1 percent); health (0.3 percent from 1.9 percent), and education (0.9 percent from 1.2 percent).

In addition, prices fell for: recreation services & culture (-2.5 percent from 0.5 percent in May); furnishings, household equipment & routine maintenance (-1 percent from 1.5 percent); miscellaneous goods & services (-2.6 from 0.4 percent); alcoholic beverages & tobacco (-0.7 percent from 0.1 percent); clothing and footwear (-3.1 percent from -0.7 percent); and communication (-3.9 percent from -0.9 percent). 

Meanwhile, cost increased at a faster pace for transport (5.5 percent from 3.8 percent in May).
 
Annual core inflation eased sharply to 0.1 percent in June (from 1.5 percent), and marking the lowest figure on record.

On a monthly basis, consumer prices dropped 1.2 percent, after increasing by 0.2 percent in May.






Wednesday July 11 2018
Malaysia Leaves Key Rate Unchanged at 3.25%
Bank Negara Malaysia l Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The Central Bank of Malaysia held its benchmark interest rate at 3.25 percent on July 11th, 2018, as widely expected. Growth is projected to be sustained and inflationary pressures would weaken this year, especially after the new government removed the 6% Goods and Services Tax (GST) imposed in 2015.

Statement by the Bank Negara Malaysia:

The global economy continues to expand albeit with some divergence across economies while global trade sustained its growth momentum. In the advanced economies, rising income and policy support, particularly in the US, will continue to drive growth. Growth in Asia will be supported by sustained domestic activity and external demand. However, the balance of risks to the outlook has tilted to the downside. The intensification of global trade tensions could affect sentiments and weigh on trade, investment and consumption. Coupled with ongoing monetary policy normalisation in the advanced economies, shifting investor expectations and sentiments could lead to further capital outflows and financial market adjustments in some emerging economies.

The Malaysian economy continued to expand in the first half of 2018, supported by private sector activity with additional impetus from net exports. The positive growth performance is expected to be sustained, driven by both domestic and external demand. Private consumption will be underpinned by continued wage and employment growth, with an additional lift from higher household spending due to the tax holiday. Investment activity is projected to be supported by capacity expansion mainly in the export-oriented industries and ongoing infrastructure projects, particularly in the transport and utilities sub-sectors. The external sector will continue to benefit from the sustained global growth momentum. The growth outlook will be further supported with greater certainty in domestic policy in the coming months. Overall, the Malaysian economy is expected to remain on a steady growth path.

Headline inflation for 2018 is projected to be lower than earlier forecast taking into consideration the impact of recent policy measures on domestic cost factors. The impact of these measures on inflation, however, is transitory. Headline inflation is likely to turn negative in some months and remain low in the first half of 2019 before trending upwards as these transitory effects lapse. Core inflation is nevertheless expected to remain relatively stable in line with sustained domestic demand.

The positive domestic economic outlook, sound financial sector and improving current account surplus of the balance of payments will continue to support Malaysia’s fundamentals. Domestic financial markets have remained resilient despite non-resident portfolio outflows. The ringgit exchange rate would be more reflective of the underlying fundamentals of the economy when the external and domestic uncertainties recede. Notwithstanding the heightened financial market volatility, the domestic monetary and financial conditions remain supportive of economic growth. Bank Negara Malaysia’s monetary operations continue to ensure sufficient liquidity to support the orderly functioning of money and foreign exchange markets and intermediation activity.

At the current level of the OPR, the degree of monetary accommodativeness is consistent with the intended policy stance. The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation.




Thursday July 05 2018
Malaysia Trade Surplus Widens Sharply in May
Department of Statistics, Malaysia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Malaysia's trade surplus jumped 47.1 percent to MYR 8.1 billion in May of 2018 from MYR 5.5 billion in the same month of the prior year but below market estimates of a MYR 11 billion surplus, as exports rose more than imports.

In May sales increased by 3.4 percent from a year earlier to MYR 82.1 billion from a 14 percent jump in April and below market consensus of a 6.4 percent growth. Sales grew for: electrical & electronic products (2.1 percent to MYR 29.2 billion, 35.5 percent of total exports); crude petroleum (45.8 percent to MYR 3.1 billion, 3.8 percent share); refined petroleum products (10 percent to MYR 7.1 billion, 6.2 percent share); and liquefied natural gas (61 percent to MYR 3.1 billion, 3.8 percent share).
 
In contrast outbound shipments fell for : natural rubber (-19.1 percent to MYR 334.9 million, 0.4 percent share); timber and timber based products (-14.3 percent to MYR 1.7 billion, 2.1 percent share), and palm oil-based products (-15.4 percent to MYR 5.8 billion, 7 percent share). Exports rose to the EU countries (11.4 percent), followed by those to China (7.4 percent). By contrast exports fell to Singapore (-9.8 percent); the US (-5.6 percent), and the ASEAN countries (-1.9 percent).
 
Imports edged up 0.1 percent year-on-year to MYR 74 billion in May of 2018 from a 9.1 percent surge in the prior month, as capital goods declined by 0.7 percent to MYR 9.8 billion, mainly due to a fall in capital goods except transport equipment fell (-15.3 pct) while purchases of transport equipment, industrial jumped (105.6 pct). On the other hand, sales of intermediate goods dropped 5.3 percent to MYR 40.1 billion, dragged by parts and accessories of capital goods except transport equipment (-11.3 pct); fuel & lubricants, processed, others (-41.2 pct) . Also, purchases declined for consumption goods (-10.2 pct to MYR 6 billion), led by semi-durables (-21 pct), non-durables (-6.4 pct), and food and beverages, primary mainly for household consumption (-12.3 pct).
 
In April the trade surplus stood at MYR 13.1 billion.
 
Considering January to May, the trade surplus increased sharply to MYR 54.6 billion from MYR 33.05 billion in the same period of 2017.





Wednesday June 20 2018
Malaysia May Inflation Rate at 4-Month High of 1.8%
Department of Statistics, Malaysia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's consumer price inflation went up to 1.8 percent year-on-year in May of 2018 from 1.4 percent in the previous month and in line with market expectations. It is the highest inflation rate since January, as prices were higher mainly for housing and transport.

Year-on-year, prices rose at a faster pace for : housing, water, electricity, gas, and other fuels (2.1 percent from 2 percent in April); transport (3.8 percent from 0.4 percent), and education (1.2 percent from 1.1 percent).
 
Meanwhile, cost increased at a softer pace for food & non-alcoholic beverages (2.2 percent from 2.6 percent in April); recreation services & culture (0.5 percent from 0.6 percent); furnishings, household equipment & routine maintenance (1.5 percent from 1.8 percent); hotels (2.1 percent from 2.2 percent); health (1.9 percent from 2.1 percent), and alcoholic beverages & tobacco (0.1 percent from 0.2 percent).
 
At the same time, inflation was steady for: miscellaneous goods & services (at 0.4 percent). On the other hand, prices continued to fall for clothing and footwear (-0.7 percent from -0.8 percent) and communication (-0.9 percent from -0.7 percent). 

Annual core inflation was steady at 1.5 percent in May, and remaining its the lowest figure on record.

On a monthly basis, consumer prices edged up 0.2 percent, after being flat in April.
 
 


Tuesday June 05 2018
Malaysia Trade Surplus Widens Sharply in April
Department of Statistics, Malaysia l Chusnul Ch Manan| chusnul@tradingeconomics.com

Malaysia's trade surplus jumped 50.9 percent to MYR 13.1 billion in April of 2018 from MYR 8.7 billion in the same month of the prior year and beating market estimates of a MYR 12.2 billion surplus, as exports rose more than imports.

In April sales jumped by 14 percent from a year earlier to MYR 84.2 billion from a 2.2 percent rise in March and above market consensus of a 6.3 percent growth. Sales grew for: electrical & electronic products (21.2 percent to MYR 31.8 billion, 37.7 percent of total exports); crude petroleum (22.7 percent to MYR 3.6 billion, 2.9 percent share); refined petroleum products (38.9 percent to MYR 5.2  billion, 6.2 percent share); timber and timber based products (1.6 percent to MYR 1.9 billion, 2.3 percent share), and palm oil-based products (0.2 percent to MYR 6.1 billion, 7.2 percent share). In contrast outbound shipments fell for : natural rubber (-42.6 percent to MYR 316 million, 0.4 percent share), and liquefied natural gas (-12.5 percent to MYR 2.8 billion, 3.4 percent share).
 
Exports to China went up (22 percent), followed by those to the EU countries (19.5 percent); the ASEAN countries (13.67 percent); the US (7.5 percent), and Singapore (3.7 percent).
 
Imports surged 9.1 percent year-on-year to MYR 71.2 billion in April of 2018, recovering from a 9.6 percent drop in the prior month, as capital goods increased by 4.8 percent to MYR 8.4 billion, mainly due to a rise in transport equipment, industrial (166.6 pct) while purchases of capital goods except transport equipment fell (-4.3 pct). On the other hand, sales of intermediate goods dropped 11.9 percent to MYR 33.8 billion, dragged by parts and accessories of capital goods except transpport equipment (-36.8 pct) while sales rose for fuel & lubricants, processed, others (78.5 pct) and parts & accessories of of  transport equipment (16.4 pct). Also, purchases declined for consumption goods (-1.8 pct to MYR 5.6 billion), led by semi-durables (-8.6 pct), non-durables (-5.1 pct).
 
In March the trade surplus stood at MYR 14.7 billion.
 
Considering January to April 2018, the trade surplus was MYR 46.5 billion with exports rising by 7.8 percent compared to the same period a year earlier and imports increasing by 1.6 percent.
 



Wednesday May 23 2018
Malaysia April Inflation Rate Rises to 1.4%
Statistics Malaysia l Rida | rida@tradingeconomics.com

Malaysia's consumer price inflation edged up to 1.4 percent year-on-year in April of 2018 from 1.3 percent in the previous month and below market expectations of 1.6 percent. Prices rebounded for transport and rose more for restaurants & hotels and recreation and culture. Conversely, cost eased for food & non-alcoholic beverages and inflation was steady for housing & utilities.

Year-on-year, prices rebounded for transport (0.4 percent from -1.5 percent in March) and were higher mainly for restaurants and hotels (2.2 percent from 2 percent); recreation services & culture (0.6 percent from 0.5 percent); health (2.1 percent from 2 percent) and alcoholic beverages & tobacco (0.2 percent from 0.1 percent).

Meanwhile, cost increased at a softer pace for food & non-alcoholic beverages (2.6 percent from 2.8 percent) and furnishings, household equipment & routine maintenance (1.8 percent from 2.1 percent). At the same time, inflation was steady for: housing, water, electricity, gas & other fuels (2 percent);  miscellaneous goods & services (0.4 percent) and education (1.1 percent). Also, prices continued to fall for clothing and footwear (-0.8 percent from -0.7 percent) and communication (-0.7 percent from -0.7 percent). 

Annual core inflation fell to 1.5 percent in April from 1.7 percent in March and reaching the lowest figure on record.

On a monthly basis, consumer prices were flat, after a 0.3 percent fall in March.


Thursday May 17 2018
Malaysia Q1 GDP Growth Weakest in 5 Quarters
Department of Statistics, Malaysia | Chusnul Ch Manan | chusnul@tradingeconomics.com

The Malaysian economy advanced 5.4 percent year-on-year in the March quarter of 2018, compared to a 5.9 percent growth in the previous three months and below market consensus of a 5.5 percent expansion.It was the weakest growth since the fourth quarter 2016, as private consumption, investment, exports, and government spending increased at softer paces.

In the first quarter, gross fixed capital formation expanded 0.1 percent, much slower than a 4.3 percent growth in the preceding quarter, due to a deceleration in machinery & equipment and other asset. In addition, goverment spending edged up 0.4 percent, slower than a 6.8 percent increase in the prior three months. Exports grew by 3.7 percent, lower than a 6.7 percent rise in the December quarter. Imports declined 2 percent, compared to a 7.3 percent rise in the previous three months. Meantime, private consumption increased by 6.9 percent year-on-year, following a 7 percent rise in the previous period, supported by purchases of food & non-alcoholic beverages, communication, restaurant & hotel and housing & utilities.
 
On the production side, growth slowed for the agriculture sector (2.8 percent vs 10.7 percent in Q4); manufacturing (5.3 percent vs 5.4 percent), and construction (4.9 percent vs 5.9 percent). On the positive note, the services grew by 6.5 percent compared to 6.2 percent increased in Q4. Also, the mining & quarrying sector edged up 0.1 percent, after declining 0.3 percent in Q4.
 
Moving forward, economic growth is expected to remain strong in 2018, boosted by domestic demand. Meanwhile, exports are expected to continue to benefit from favourable global demand conditions. Headline inflation is expected to average 2%-3% in 2018, due to a smaller contribution from global cost factors and a stronger ringgit exchange rate compared to 2017.
 
On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.4 percent,  slower than an upwardly revised 1 percent growth in the previous period.
 




Thursday May 10 2018
Malaysia Holds Key Interest Rate at 3.25%
Bank Negara Malaysia l Joana Ferreira | joana.ferreira@tradingeconomics.com

The Central Bank of Malaysia held its benchmark interest rate at 3.25 percent on May 10th, 2018, as widely expected, saying the current monetary policy stance remains accommodative to support growth amid lower inflation.

Statement by the Bank Negara Malaysia:

The global economy continues to gain strength with growth being more broad based and synchronised across regions. Global trade sustained its strong momentum. In the advanced economies, higher wages and diminishing labour market slack remain supportive of growth. Additional policy support, particularly in the US, is expected to lift growth further. In Asia, growth will be driven by sustained domestic activity and strong external demand. Financial markets continue to face intermittent volatility amid rising trade tensions. Global growth prospects remain balanced although there are risks should trade and geopolitical tensions worsen.

For the Malaysian economy, latest indicators point towards continued expansion in private sector activity and exports. Going forward, the positive growth momentum is expected to be sustained, driven by the strength in both domestic and external demand. Private consumption will be supported by favourable income and labour market conditions. Investment activity is projected to be sustained by implementation of ongoing infrastructure projects and capacity expansion by firms. On the external front, exports are expected to continue benefitting from the positive momentum in global growth and trade in advanced and regional economies. Overall, the prospects for the Malaysian economy remain strong.

Headline inflation is expected to remain moderate for the year as a whole on expectations of a smaller effect from global cost factors. A stronger ringgit exchange rate compared to 2017 will mitigate import costs. However, the trajectory of headline inflation will be dependent on future global oil prices which remain highly uncertain. Underlying inflation, as measured by core inflation, is projected to remain moderate amid stable demand conditions.

Despite financial market volatility due to external developments, domestic financial markets have remained resilient. Malaysia’s economic fundamentals are strongly anchored. The domestic economic outlook remains positive, the financial sector is strong and monetary and financial conditions are supportive of economic growth in the post-election environment.

At the current level of the OPR, the degree of monetary accommodativeness is consistent with the policy stance to ensure that the domestic economy continues on a steady growth path amid lower inflation. The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation.


Friday May 04 2018
Malaysia March Trade Surplus Largest in 7-1/2 Years
Department of Statistics, Malaysia | Chusnul Ch Manan | chusnul@tradingeconomics.com

Malaysia's trade surplus jumped 172 percent to MYR 14.7 billion in March of 2018 from MYR 5.4 billion in the same month of the prior year and beating market estimates of a MYR 9.9 billion surplus, as exports rose while imports slumped.

In March sales increased by 2.2 percent from a year earlier to MYR 84.5 billion, recovering from a 2 percent fall in February and above market consensus of a 1.7 percent growth. Sales grew for: electrical & electronic products (8.7 percent to MYR 31.8 billion, 37.7 percent of total exports) and crude petroleum (18.4 percent to MYR 3.6 billion, 4.3 percent share). In contrast outbound shipments fell for : refined petroleum products (-8.6 percent to MYR 4.3  billion, 5.1 percent share); palm oil and palm oil-based products (-6.6 percent to MYR 6 billion, 7.2 percent share); natural rubber (-37.8 percent to MYR 349.1 million, 0.4 percent share); timber and timber based products (-12.8 percent to MYR 1.9 billion, 2.3 percent share); liquefied natural gas (-3.3 percent to MYR 3.3 billion, 3.9 percent share).
 
Exports to the EU countries went up (5.3 percent). By contrast, exports fell to China (-4.7 percent), followed by those to Singapore (-4.3 percent); the ASEAN countries (-2.7 percent), and the US (-0.1 percent).
 
Imports slumped 9.6 percent year-on-year to MYR 69.8 billion in March of 2018, after a 2.8 percent drop in the prior month, and worse than market consensus of a 3.3 percent drop. It marked the second straight decline in inbound shipments and the worst since September 2009, as purchases went down for intermediate goods (-14.4 percent to MYR 36.9 billion), led by food & beverages, processed, mainly for industries (-44.9 pct); fuel & lubricants, processed, others (-36.4 pct), and parts & accessories of capital goods, except transport equipment (-27.3 pct). Also, purchases declined for consumption goods (-12.4 pct to MYR 5.3 billion), led by durbales (-26.4 pct); semi-durables (-24.1 pct); food and beverages, primary, mainly for household consumption (-13.1 pct), and non-durables (-10.1 pct). In addition, capital goods tumbled by 30.5 percent to MYR 9.4 billion, mainly due to the decrease in both transport equipment, industrial (-18 pct) and capital goods except transport equipment (-32.9 pct).
 
In February the trade surplus stood at MYR 9 billion.
 
Considering January to March 2018, the trade surplus was MYR 33.4 billion, with exports rising by 5.8 percent compared to the same period a year earlier and imports decreasing by 0.8 percent.
 



Wednesday April 18 2018
Malaysia Inflation Rate at 20-Month Low of 1.3% in March
Department of Statistics, Malaysia | Chusnul Ch Manan| chusnul@tradingeconomics.com

Consumer prices in Malaysia increased 1.3 percent year-on-year in March of 2018, after a 1.4 percent rise in the prior month while markets estimated a 1.6 percent gain. It was the lowest inflation rate since July 2016, due to a slowdown in cost of food & non-alcoholic beverages while prices of transport fell more than in a month earlier.

Year-on-year, prices increased at a slower pace for both food & non-alcoholic beverages (2.8 percent from 3 percent in February) and health (2 percent from 2.1 percent). Meantime, inflation was steady for: housing, water, electricity, gas & other fuels (2 percent); miscellaneous (0.4 percent); education (1.1 percent); furnishings, household equipment & routine maintenance (2.1 percent), and alcoholic beverages & tobacco (0.1 percent). Meanwhile, cost rose faster for both restaurants and hotels (2 percent from 1.8 percent in the previous month) and recreation services & culture (0.5 percent from 0.4 percent),
 
In addition, prices fell more than in a month earlier for both transport (-1.5 percent from -0.3 percent in February) and communication (-0.7 percent from -0.5 percent) while prices of clothing dropped 0.7 percent, the same as in the prior month.
 
Annual core inflation fell to 1.7 percent from a year earlier, from 1.8 percent in February. It was the lowest figure on record.
 
On a monthly basis, consumer prices edged down 0.3 percent, after being flat in a month earlier.