• Malaysia’s headline inflation remained at 1.5% in December 2023. Index points was recorded at 131.2 against 129.2 in the previous year. The annual headline inflation in 2023 increased by 2.5% y/y compared to 3.4% y/y in 2022.

• Core inflation increased slower at 1.9% (November 2023: 2.0%) and still surpassed the overall national inflation rate (1.5%)

• The number of employed persons grew 0.2% m/m or 26.6 million persons in December 2023 to record 16.46 million persons. Unemployed persons continued to decline to 0.2% m/m to 567.8 thousand persons from 569.2 thousand person previously.

• December’s labour force participation rate (LFPR) recorded 70.2% during the month (November 2023: 70.1%).

• The unemployment rate in December 2023 remained at 3.3%. The employment-to-population ratio, which indicates the ability of an economy to create employment, unchanged at 67.8% as in the previous month.

• Outside labour force decreased to 0.02% m/m to 7.23 million persons in December 2023.

• The Industrial Production Index slipped by 0.1% y/y in December 2023 after two consecutive months of growth (November 2023: 0.6%; October 2023: 2.4%), weighed down by the Manufacturing sector that turned negative 1.4% y/y. Meanwhile, the Mining sector grew 3.6% (November 2023: 1.9%) while the Electricity sector rose 4.6% compared to 4.3% y/y in the preceding month.

• The sales value of the manufacturing sector slipped further to -4.2% y/y or RM149.9 billion in December 2023, marking the largest decline since May 2020 (-20.4%), according to DOSM.

• On month-on-month basis, sales value decreased 3.3% as compared to -1.1% recorded in November 2023.

• The domestic-oriented industries grew 4.2% y/y in December 2023 against 5.8% y/y in the previous month.

• On yearly basis, the export-oriented industries dropped by 4.1% y/y in the same month.

• Sales value of wholesale & retail trade in December 2023 registered a growth of 4.8 % y/y to RM143.9 billion, contributed by the positive year-on-year growth in all sub-sectors namely Motor vehicles (5.9%), Retail trade (5.0%) and Wholesale Trade (4.4%).

• The Leading Index recorded 109.8 points in November 2023 compared to 110.0 points in the previous year. On year-on-year basis, it decreased by 0.2%.

• The Coincident Index for the current economic position increased to 2.6% y/y to 123.7 points compared to 120.3 in the same month of the preceding year.

• The Diffusion Index for Leading and Coincident index has shown a downward trend where both indices posted below 50.0% in November 2023.

• The Consumer Sentiment index edges up to 89.4 points in 4Q2023 while Employment Index recorded 104.5 in the same quarter.

• Malaysia’s exports in December 2023 recorded a double-digit contraction of 10.0% y/y, however, imports increased to 2.9% y/y to RM103.6 billion. Meanwhile, trade surplus declined by 57.8% to RM11.8 billion in the same month. Total trade valued RM225.1 in December compared to RM235.2 in the previous year.

• Domestic exports declined by 7.4% y/y from RM105.0 billion in the same month of the preceding year to RM97.3 billion in December 2023, while re-exports with a value of RM21.2 billion, decreased by 20.3% y/y from RM26.6 billion in the previous year.

• Imports by End Use for intermediate goods increased by 10.1% while capital goods increased to 24.6% y/y, However, consumption goods contracted to 0.7% y/y in December 2024.

• The industry total loan growth increased to 5.3% y/y in December 2023 from 4.9% y/y in the previous month. The household loan growth was sustained at 5.8% y/y, while nonhousehold increased to 4.5% y/y compared to 3.5% y/y in November 2023.

• Loan application in December grew stronger to 30.1% compared to -16.2% y/y in the same month of the preceding year.

• Loan-to-fund-ratio fell to 81.8% (November 2023:82.5%). Loan-to-deposit ratio (LD Ratio) for the sector was sustained at 85.7 % while liquidity coverage ratio (LCR) rose to 160.9% (November 2023: 150.0%). 

• Total deposit for the banking system grew by 5.6% y/y in December 2023 (November 2023: 5.3%).

• The banking system’s current account saving account (CASA) growth registered a growth of 3.7% y/y in December 2023. Meanwhile, the CASA ratio registered 29.5% in December 2023 compared to 29.4% previously.

• According to Bank Negara Malaysia (BNM), credit to the private non-financial sector grew by 4.7% y/y as at end December 2023 (November 2023: 4.6%), supported by higher growth in credit to businesses (3.8%: November 2023: 3.5%).

• The business loans outstanding increased by 3.6% (November 2023: 2.7%) supported by higher growth in working capital loans. The outstanding loans to SMEs improved to 8.2 % y/y. Meanwhile the outstanding corporate bonds growth moderated slightly to 4.2% (November 2023: 4.6%).

• Outstanding household loan growth was sustained at 5.6% in December 2023, supported by stable growth across most loan purposes.

Source: AmInvest Research - 22 Feb 2024