• Malaysia’s CPI declined at a slower pace of -0.2% yoy in January as compared to -1.4% yoy in the previous month.

• Malaysia’s exports increased by 6.6% yoy; Imports registered 1.3% yoy growth in January.

• China’s manufacturing PMI expands at slower pace in February

• US 4Q20 GDP was revised slightly upwards to an annualized rate of 4.1%.

• The Bank of Korea (BOK) and the Reserve Bank of New Zealand (RBNZ) decided to leave the unchanged at 0.50%

MALAYSIA ECONOMY

• The World Bank commented that Malaysia’s economy is expected to return to positive growth in 2021, on the back of “sustained progress in the vaccine rollouts that will boost consumption worldwide”. The agency expects Malaysia to expand between 5.6% – 6.7% in 2021, on the back of global growth which is expected to grow by 4.0%. However, downside risks to the growth outlook will include the “unexpected delay in vaccine rollout, ineffective containment, elevated number of vulnerable households and domestic political uncertainty”.

• Malaysia’s CPI declined at a slower pace of -0.2% yoy in January compared to - 1.4% yoy in the previous month. This was the eleventh straight month of deflation but the softest pace since March 2020, amid ongoing COVID-19 disruption. The lower deflation was mainly on continued slower decline in transport and electricity costs. However, on a monthly basis, consumer prices were up 1.2% in January, the highest since February 2017, after a 0.5% mom rise in December. Core inflation was stable at +0.7% yoy

• Exports gained by 6.6% yoy in Jan 2021 (Dec’20: +10.8%), with the export recorded the highest value ever for the month of January at RM89.6bn. It also marked the fifth straight month of expansion. On a mom basis, exports fell 6.4% (Dec: +13.1% mom). Exports of manufactured goods expanded 11.7% yoy. However, agriculture goods plunged by 7.2% yoy, while exports of mining goods remained double-digit decrease of 31.0% yoy. Imports continued to register a growth of 1.3% yoy (Dec: +1.6%), supported by a rebound in imports of intermediate goods. As a result, trade surplus narrowed down to RM16.6bn in January 2021.

• The producer price index fell at a softer rate of -0.1% yoy in January, following a 2.1% decrease in December. On a month-on-month basis, producer prices rose 2.0% in January, following a 1.7% increase in the preceding month.

• Leading Index (LI) sustained at 7.1% yoy since November 2020. The expansion in LI was mainly driven by Bursa Malaysia Industrial Index with Health Care Index and Transportation and Logistic Index as the contributors. However, the LI showed a decline of negative 0.3% mom. The Coincident Index (CI) which measures the overall current economic performance, grew 1.2% mom. The CI indicated a better trend by registering -1.4% yoy in December from -2.3% in November 2020.

Source: BIMB Securities Research - 1 Mar 2021