Economic outlook brightens as LI rises for third month

PETALING JAYA: Malaysia’s Leading Index (LI) registered an increase for a third consecutive month, as it expanded 7.7% to 109.2 points in July 2020 from 101.4 points registered in the same month of the previous year, contributed by the Bursa Malaysia Industrial Index which saw a 1.8% jump, according to the Department of Statistics.

Chief Statistician Malaysia Mohd Uzir Mahidin said the LI illustrates a sharp rebound which indicates an economic recovery in the near future and a brighter economic outlook towards early 2021.

“However, the signal should be perceived with caution since the pandemic still remains in Malaysia and globally,” he said in a statement.

Meanwhile, the Coincident Index (CI), which reflects the overall current economic performance, has shown better year-on-year growth, registering 2.4% in July 2020 compared with -3.1% in the previous month.

The Statistics Department noted that the trend of gradual improvement in the CI started in May. On a monthly basis, July saw the CI improve by 1.3%, mainly supported by the volume index of retail trade which grew 1.1%.

Mohd Uzir said the improvement in the index is in accordance with other economic indicators such as wholesale and retail, manufacturing and external sector.

He noted that the volume index of wholesale and retail trade has started to show signs of recovery.

For July, the CI was at 127.7 points and registered a better annual growth rate of -3.9%, while the Industrial Production Index (IPI) surged 1.2%, demonstrating positive growth for the first time since February 2020.

The data attributed the improvement in IPI to the 2.9% improvement in manufacturing index.

“Concurrently, exports continued to record positive growth in July 2020, expanding by 3.1% year on year to RM92.5 billion. This was the highest value since November 2018,” said the chief statistician.