KUALA LUMPUR (Nov 25): Malaysia is expected to continue to chart economic recovery based on the smooth growth rate of the Leading Index (LI), which increased to 8.6% to reach 109.5 points in September 2020 compared with 100.8 points in the same month in 2019, said the Department of Statistics Malaysia (DOSM).
Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the monthly change in the LI showed the same trend, rising 0.9% (August 2020: -0.5%) and the growth was propelled by the real imports of, among others, semiconductors particularly electronic integrated circuits.
"Correspondingly, the number of new companies registered especially in the wholesale and retail trade sub-sector significantly contributed to the increase," he said in a statement on the Malaysian Economic Indicators: Leading, Coincident and Lagging Indexes for September 2020.
“Concurrently, the growth rate of LI (smoothed) remained above trend which indicates that Malaysia continues to chart economic recovery despite the challenging circumstances.”
The LI performance is used to predict the economic direction in an average of four to six months ahead.
In addition, he said the announcement of Budget 2021 which targeted people's prosperity, business continuity and economic resilience will revitalise the economy from the pandemic aftermath.
However, the LI signal may be dampened by the rising number of Covid-19 cases and extension of the conditional movement control order (CMCO) to date.
Meanwhile, Mohd Uzir said the Coincident Index (CI) attained 113.1 points in the reference month, which showed a better annual growth trend, registering a decrease of 1% in September 2020 against -2.3% in August.
"The CI which reflects the current state of the economy increased further to a monthly growth of 1% in September (August: 0.5%) with the Volume Index of Retail Trade (0.3%) as the main driver.
"Accordingly, the sales value of wholesale and retail trade recorded RM110.8 billion in September with a growth of 0.2% year-on-year (y-o-y). This was the first positive growth recorded after the Covid-19 outbreak, led by motor vehicles which advanced by 17.1%," he added.
The current economic performance is also reflected by the higher manufacturing sales in September 2020 which grew 3.7% y-o-y to RM121.2 billion.
The rise in sales value was driven by the increase in transport equipment and other manufactured products (14.3%), food, beverages and tobacco products (14.2%), and electrical and electronics products (7.2%).