Perceiving the world economic landscape, in its most recent Global Economic Prospects, the World Bank predicted that, the global economy would ease to 2.4 per cent in 2024. This will be the third year in a row of slowing down, indicating that global economic activity is persistently softening following partly by the increased geopolitical risks and heightened uncertainty in the commodity markets.
The Department of Statistics Malaysia (DOSM) released the Malaysian Economic Statistics Review (MESR) Vol. 1/2024 today (Jan 31) which focuses on the recent statistics released in November 2023 and some forthcoming statistics for December 2023.
Chief Statistician Malaysia, Dato’ Sri Dr. Mohd Uzir Mahidin said, “In close analysis to the country’s economic scenario, based on Advance Gross Domestic Product (GDP) estimates, Malaysia’s economy is estimated to grow at 3.4 per cent in the fourth quarter of 2023. This represents a slight uptick from the previous quarter with 3.3 percent. Notably, the Services sector retained its position as the primary driver of economic performance during this period, with positive growth observed across all other sectors.”
For the monthly economic indicators performance, Malaysia’s Industrial Production Index (IPI), which measures the real output in the manufacturing, mining and electric industries, registered an increase of 0.6 per cent year-on-year in November 2023. The marginal increase was backed by an expansion in the Mining sector at 1.9 per cent, and in the Electricity sector at 4.2 per cent. However, the Manufacturing sector experienced a downturn, registering a negative 0.1 per cent after two consecutive months of positive growth. In terms of sales value, the Manufacturing sector’ sales declined by 2.6 per cent year-on-year in November 2023 to RM155.0 billion, primarily due to the substantial drop in the petroleum, chemical, rubber & plastic products sub-sector by 10.8 per cent; and the electrical & electronics products sub-sector which fell by 5.3 per cent.
In view of Wholesale & Retail Trade sector, the monthly sales value in November 2023 recorded RM142.6 billion, grew 6.2 per cent year-on-year. The noteworthy growth was primarily driven by the Wholesale Trade sub-sector, which increased 6.2 per cent or RM3.7 billion to register RM63.2 billion. This was followed by Retail Trade and Motor Vehicles with 4.4 per cent (+RM2.6 billion) and 12.7 per cent (+RM2.0 billion), respectively.
Looking at prices perspective, in November 2023, Malaysia experienced a modest increase of 1.5 per cent in inflation. The uptick in inflation was attributed to Restaurants & Hotels, 4.3 per cent (October 2023: 4.6%); Food & Non-Alcoholic Beverages, 2.6 per cent and Housing, Water, Electricity, Gas & Other Fuels, 1.7 per cent. The inflation rate remained at 1.5 per cent in December 2023. Malaysia’s Producer Price Index (PPI) recorded a negative 1.5 per cent in November 2023 contributed by the decrease in all sectors with exception for Water supply which increased by 1.0 per cent. In December 2023, PPI continued to decrease of 1.3 per cent.
On the trade front, Malaysia’s total trade shrank 2.4 percent from RM237.6 billion in November 2022 to RM231.8 billion. Exports decreased 5.9 per cent to RM122.1 billion, while imports increased 1.7 per cent to RM109.7 billion, an annual increase for the first time since February 2023. The trade balance remained in surplus at RM12.4 billion, down 43.1 per cent from the previous year. In December 2023, the total trade amounted to RM225.1 billion, with RM118.5 billion in exports and RM106.7 billion in imports.
Pertaining to the labour scenario, Malaysia’s labour market in November 2023 exhibited an increase of 2.0 per cent (+322.5 thousand persons) reaching to 16.43 million persons as compared to the preceding year. The labour force participation rate (LFPR) during the month remained at 70.1 per cent. As compared to November last year, the number of labour force recorded an increase of 291.0 thousand persons (+1.7%) to 16.71 million persons. Concurrently, the unemployment rate in November 2023 registered 3.3 per cent an improvement as compared to 3.4 per cent in the previous month.
In his concluding remarks, Dato’ Sri Dr. Mohd Uzir Mahidin said “In November 2023, Malaysia’s Leading Index declined 0.2 per cent, dropping to 109.8 points from 110.0 points the previous year, primarily due to a significant decrease in the Number of Housing Units Approved (-25.8%). On the other hand, the Bursa Malaysia Industrial Index expanded by 17.1% since May 2023, indicating a positive trend. The monthly Leading Index performance showed signs of recovery, with a 0.5 per cent rebound compared to the previous month, driven by an increase in Real Imports of Semiconductors (1.0%). Despite facing global market uncertainty, Malaysia’s economy is expected to sustain moderate growth, supported by the resilient performance of domestic-oriented industries.”
