KUALA LUMPUR: The Statistics Department expects Malaysia to see softer economic growth in the months ahead after the Leading Index (LI), which gauges economic direction, showed a slower year-on-year growth of 0.7% in January compared to 1.9% in December 2019.
Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin noted that the index for reference month January 2020 had not taken into account the internal shocks that had a direct impact on the economy, notably the Covid-19 pandemic plaguing Malaysia since Jan 23.
“These pandemic effects are expected to be reflected in the index of subsequent months,” he said in a statement today.
On a month-on-month basis, he said the LI increased 0.1% in January from a negative 0.3% in the previous month.
“Among seven components of LI, two posted rises, namely expected sales value in manufacturing sector (0.5) and Bursa Malaysia Industrial Index (0.1),” he explained.
Mohd Uzir said the Coincident Index (CI), which measures the overall current economic performance, was virtually unchanged at 0.2% in January against December 2019.
According to him, total employment in the manufacturing sector, which stood at 0.2%, was the main contributor to the increase.
“However, the CI showed a lower annual growth rate of 2% cent in January compared to 2.4% recorded in the previous month,” he said.
Mohd Uzir said the Diffusion Index for LI and CI remained above 50% with a downward trend.
The Diffusion Index for LI and CI stood at 57.1% and 83.3%, respectively, in January compared with 71.4% and 100%, respectively, in December last year.
The Malaysian Economic Indicators consisting of Leading, Coincident and Lagging Indexes were rebased to 2015 from 2005.
“This rebasing was implemented to improve compilation concepts and methodologies in line with international best practices,” Mohd Uzir explained. – March 30, 2020, Bernama
