Monitor monthly economic indicators to gauge impact of Covid-19 fight: chief statistician

KUALA LUMPUR – It is crucial to regularly monitor the challenging situation brought on by the Covid-19 pandemic through economic indicators to lessen adverse impacts on the economy, said chief statistician Datuk Seri Mohd Uzir Mahidin.

“The pandemic has caused major challenges to the global economy. Almost all countries worldwide experienced an economic slowdown in 2020 and it is likely to deteriorate further,” he said in a statement today.

He cited the latest indicators for certain countries, including China, which recorded rapid growth of 6.5% in the fourth quarter (Q4) of 2020, with improved exports and manufacturing sector performance. 

On Malaysia's performance, he said export performance continued to show signs of recovery in November last year, marking the third consecutive month of year-on-year (y-o-y) growth.

Exports grew 4.3% y-o-y in the month, supported mainly by higher exports of merchandise to major trading partners, namely the US, Singapore, China, Hong Kong and the European Union.

“(However,) imports declined by a more significant magnitude of negative 9.0%,” he said.

Meanwhile, the industrial production index (IPI) recorded a decline of 2.2% in November compared with the same month in 2019.

“However, the manufacturing sector, which was the largest component in the IPI, posted a 2.0% (increase), steered by the growth of both exports and domestic-oriented output,” he said.

In contrast, the sales value of the wholesale and retail trade in November declined by 1.2% y-o-y due to the weaker performance of retail trade, which contracted 2.3%.

In November, the producer price index (PPI), which measures the average price change imposed by local producers on their output, fell at a smaller rate of 3.0% y-o-y due to the decrease in the mining, electricity and gas supply, and manufacturing sectors.

He said a similar trend was observed in the consumer price index (CPI) for the same month, with the CPI declining 1.7% y-o-y.

However, based on last month's statistics, the CPI improved to negative 1.4%, bringing the contraction in Q4 2020 to 1.5%.

Uzir said that 2020 saw a whirlwind of challenges due to Covid-19 and repercussions from the implementation of the different phases of the movement control order (MCO) for the Malaysian economy.

“As the MCO 2.0 implementation is still ongoing until February 4, the implication of more stringent standard operating procedures of business operations and restriction on interstate travel might have undesirable effects on the economy.

“Fortunately, the Malaysian Economic and People's Protection Assistance Package (Permai) has been implemented... to ease people’s financial difficulties as well as maintain economic resilience while the country faces the spread of Covid-19.”

Uzir said based on the leading index (LI) for November, which recorded 109.1 points – a 7.1% increase from November 2019 – the Malaysian economy in 2021 is expected to remain in the pace of recovery.

“Meantime, the monthly change in LI also recorded a growth of 0.4% in November 2020 compared with the previous month.

“Despite a better improvement of LI, the reimplementation of the MCO, which is aimed at striking a balance between health and economy, will post some ramifications, especially in terms of recovery momentum.” – Bernama, January 27, 2021