Malaysian economy shows signs of recovery as leading index rises in May

Malaysian economy shows signs of recovery as leading index rises in May

23 Jul 2020

Malaysia’s economy has started to show signs of recovery with five out of seven components of the leading index (LI) for May 2020 indicating an increase based on data by the Department of Statistics.

According to Malaysia’s chief statistician Mohd Uzir Mahidin, the LI rose by 4.9% month-on-month from 0.2% reported in April 2020, with the number of new companies registered (1.8%) as the largest contributor.

On a year-on-year (y-o-y) basis, the index grew 0.6% in May, a rebound from a 5.7% yoy fall reported in the previous month.

“The improvement is in line as business activities reopened under the conditional movement control order (CMCO) starting from May 4, after economic activities “froze” in the previous month,” he said in a statement.

Mohd Uzir stated the implementation of the stimulus packages and the short-term economic recovery plan to cushion the Covid-19 impact are expected to alleviate the economic downturn. Subsequently, he expects the economy to gradually pick up in the months ahead.

Meanwhile, the coincident index (CI), which reflects the overall current economic condition, has rebounded to 10.6% month-on-month in May 2020 compared to a 15.6% decline reported in April – driven by a significant increase in volume index of retail trade. On a yearly basis, the CI improved to 11.1% from 19.3% in May 2019, as a majority of businesses were allowed to resume operation subject to strict conditions and new norms.

Mohd Uzir said this is the right time to reset the economic structure by venturing into a new business environment.

“The crisis is a catalyst for shifting and optimising the usage of new technology, business digitalisation and e-commerce platforms to revitalise the economy.”

The overall current economic condition rebounded in May – driven by a significant increase in volume index of retail trade.

Source: The Sun Daily