Overview

Malaysian economy is expected to continue its recovery trend

The Leading Index (LI) is a predictive tool used to anticipate upturns and downturns in the economy. The LI registered 108.5 points in August 2020 from 100.8 points in August 2019, maintaining an annual growth of 7.6 per cent. Based on month-on-month comparison, LI slipped to negative 0.5 per cent dragged by Number of New Companies Registered (-0.6%), Real Imports of Semi Conductors (-0.4%) and Number of Housing Units Approved (-0.1%). Despite the soften in LI for the reference month, the growth rate of smoothed LI is consistently above trend and moving upwards. This implies that the Malaysian economy is expected to continue its recovery trend in the months ahead. However, the downside risk to growth remain amid the recent spike in COVID-19 cases.

The Coincident Index (CI) which measures the current economic performance anticipated a better year-on-year growth to register negative 2.3 per cent from negative 2.4 per cent in July 2020. On a monthly basis, the CI rose to 0.5 per cent supported by the increase in Volume Index of Retail Trade (0.5%) and Real Salaries & Wages in Manufacturing sector (0.1%).

The Diffusion Index for LI recorded an improvement of 71.4 per cent in August 2020 from 57.1 per cent in July 2020. At the same time, the Diffusion Index for CI posted 0.0 per cent indicating that all CI components decreased albeit better trends as against the past six months.

(The complete indicators on Leading, Coincident and Lagging Indexes are shown in the following Table 4   .)

Released By:

DATO' SRI DR. MOHD UZIR MAHIDIN
CHIEF STATISTICIAN MALAYSIA
DEPARTMENT OF STATISTICS MALAYSIA
 DrUzir_Mahidin        Dr_Uzir

22 October 2020
 

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