KUALA LUMPUR – Malaysia’s economic outlook is expected to continue recovering, as suggested by the country’s leading index (LI), which continues to indicate that its near-term economic prospect remains upbeat, said MIDF Amanah Investment Bank Bhd.
The LI is a predictive tool used to anticipate economic upturns and downturns in an average of four to six months ahead.
“Continuous roll-out of stimulus packages, including the latest Strategic Programme to Empower the People and Economy, Kita Prihatin, Malaysian Economic and Rakyat’s Protection Assistance Package, and low-interest rate environment will continue to assist economic recovery,” the research firm said in a note today.
“However, the slow vaccination roll-out and potential new wave of infections remain as downside risks.”
Malaysia’s LI increased by 8.5% year-on-year (y-o-y) in February – the highest LI reading since September last year – buoyed by the consistent rise in Bursa Malaysia Industrial Index, particularly from the healthcare, transportation, logistics and utilities indices.
MIDF Amanah said the LI recorded a similar trend in the previous month, growing by 1.1% month-on-month, driven by the better performance in real imports of other basic precious and non-ferrous metals and number of new companies registered.
Additionally, the faster growth in real money supply had also contributed positively towards the rise in LI during the month.
“The coincident index also showed improvements, falling at a softer rate of -2.0% y-o-y in February, following the sharp growth in volume index of retail trade.
“The slower decline indicates that the current economic condition improved in February, as most businesses were allowed to continue operating under strict restrictions.” – Bernama, April 26, 2021
