The International Monetary Fund (IMF) World Economic Outlook (October 2022), the global economy is expected to grow by 2.7 per cent in 2023. Meanwhile, advanced economies are anticipated to grow by 1.1 per cent, down from 2.4 per cent in 2022. As for emerging and developing Asia, the economy is projected to grow by 4.9 per cent in 2023, up from 4.4 per cent in 2022.
The Department of Statistics Malaysia (DOSM) in its annual Malaysian Economic Statistics Review (MESR), Volume 12/2022 stated adding to this, the Economic Outlook 2023 by the Ministry of Finance forecasted Malaysia’s economic growth to moderate between 4.0 per cent and 5.0 per cent in 2023, in line with the IMF’s global forecast. Malaysia’s natural rubber production declined by 26.3 per cent to 31,795 tonnes in October 2022, down from 43,127 tonnes in the same month of 2021.
On a monthly basis, the natural rubber production fell 10.3 per cent as compared to 35,460 tonnes in September 2022. Meanwhile, the production of fresh fruit bunches increased by 6.2 per cent to 8,619,339 tonnes in November 2022 as opposed to November 2021 (8,114,872 tonnes). However, the month-on-month comparison showed a decrease of 7.2 per cent over October 2022 (9,286,351 tonnes).
Looking at the performance of industries in Malaysia, te Industrial Production Index (IPI) showed a modest growth of 4.6 per cent in October 2022 as compared to the same month of the previous year. The rise in the IPI for this month was supported by increases in the Mining index (8.6%) and Manufacturing index (4.2%).
In the meantime, Manufacturing sales in October 2022 rose 12.9 per cent year-on-year to a record RM158.9 billion. The increase in sales value was impelled by the Petroleum, Chemical, Rubber & Plastic Products, 23.8 per cent, Electrical & Electronics Products, 16.6 per cent and Food, Beverages & Tobacco Products, 4.6 per cent.
Malaysia’s Wholesale & Retail Trade sales recorded a double-digit increase of 15.2 per cent year-on-year, amounting to RM133.9 billion in October 2022. The growth was owing to the lower base effect in 2021 as well as the school holiday and Deepavali celebration.
The Retail Trade sub-sector rose RM12.0 billion or 26.0 per cent to a record RM58.3 billion.
From the price standpoint, Malaysia’s inflation rate in October 2022 increased 4.0 per cent year-on-year, lower than the rate recorded in September 2022 (4.5%). On an annual basis, the inflation for Food group remained the main contributor by registering an increase of 7.1 per cent for this month. Besides that, among the subgroups that showed slower growth were Vegetables (4.8%) and Oils & fats (2.6%). In November 2022, Malaysia’s inflation increased 4.0 per cent as compared to the same month of the previous year.
Similarly, the Producer Price Index increased by 4.0 per cent year-on-year in October 2022, lower than the 4.9 per cent rise in the previous month. The moderate rise in the PPI was led by a 7.3 per cent increase in Manufacturing index (September 2022: 8.1%). This was followed by Water supply and Electricity & gas supply indices, which increased 4.9 per cent and 1.2 per cent respectively. Meanwhile, Agriculture, forestry & fishing index declined to a negative 18.2 per cent and Mining index to negative 0.5 per cent in October 2022.
In November 2022, PPI recorded at 3.2 per cent lower than in October 2022.
As for Malaysia’s trade performance, the total trade in October 2022 recorded a double-digit growth of 21.1 per cent year-on-year to RM245.2 billion from RM202.4 billion in the same month last year. Exports edged up by 15.0 per cent to RM131.6 billion, while imports grew 29.2 per cent to RM113.5 billion. As a result, the trade balance posted a surplus of RM18.1 billion. In November 2022, Malaysia’s trade remained on a steady trajectory but at a slower pace, inclining 15.6 per cent to RM238.2 billion on a year-on-year basis.
Pertaining to the labour market scenario, the number of employed persons increased by 526.9 thousand persons or 3.4 per cent as compared with the preceding year to reach 16.08 million persons in October 2022. The employment-to-population ratio was recorded at 67.2 per cent and the unemployment rate was 3.6 per cent in October 2022.
Overall, the Leading Index (LI) in October 2022 indicates that the Malaysian economy is expected to have moderate growth in the months ahead in 2023, a repercussion of global economic uncertainty. The LI increased 0.4 per cent to 109.6 points in October 2022 (October 2021: 109.2 points), an increase of 0.4 index points.
