• Malaysia unemployment rate rose to 4.9% in January as compared to the previous month.

• Malaysia industrial production (IPI) grew 1.2% yoy in January 2021, after a 1.7% rise in December 2020.

• OECD hikes 2021 world growth forecast to 5.6%

• US CPI increased solidly in February by 0.4% (Jan’21: +0.3%) as cost of gasoline rose further.

• In the fourth quarter of 2020, seasonally adjusted GDP decreased by 0.7% in the euro area and by 0.5% in the EU compared with the previous quarter.

• China’s foreign direct investment (FDI) spiked 31.5% yoy to 176.8bn yuan (USD26.1bn) in the first two months of the year.

• European Central Bank (ECB) and the Bank of Canada (BOC) decided to maintain the interest rates.

• Weekly focus: Expect no major policy changes from Fed, BoE, BoJ, BI and CBC

MALAYSIA ECONOMY

• The unemployment rate rose to 4.9% in January as compared to the previous month. The number of unemployed persons rose by 1.3% or 9.7k persons to register 782.5k unemployed persons. The unemployment rate for January was higher by 1.7 ppt year-on-year, with the number of unemployed persons registering an additional of 270.8k persons. Employed persons continued to increase marginally 0.1% mom or 21.9k persons to 15.24m persons in January 2021 for the second straight month. Year-on-year comparison, the indicator continued with a downward trend for tenth consecutive months whereby the number of employed persons declined 0.5% during the month.

• Malaysia’s distributive trade recorded sales of RM111.7bn in January registering a negative growth of 2.7% yoy. This contraction was due to motor vehicles which slipped -13.8%. Similarly, retail trade and wholesale trade also decreased -2.5% and -0.4% respectively.

• Industrial production (IPI) grew 1.2% yoy in January 2021, after a 1.7% rise in December 2020. The industrial output marked the eighth straight month of expansion, albeit grew at a softer pace compared to the previous month. Meanwhile, production of the mining and electricity sector recorded another contraction in January.

• Malaysia continued to record higher foreign portfolio inflows for the second month of 2021 totalling RM6.2bn. It was mainly led by net foreign buying of Malaysia’s debt securities where foreign investors bought RM7.1bn of Malaysian bonds (Jan: +RM3.8bn) while foreigners remained net sellers of domestic equities (Feb: -RM0.9bn; Jan: -RM0.8bn). This marks the tenth month of net foreign inflows entering domestic bonds. Foreign inflows primarily entered Malaysian government securities that lifted foreign holdings of MGS and GII.

GLOBAL ECONOMY

• OECD upgraded 2021 global growth forecasts as “prospects for a stronger economic recovery from the COVID-19 pandemic have improved with the gradual global vaccines rollout and stronger support from fiscal policy although gaps in economic performance are increasing across and within countries”. World GDP growth was revised up by 1.4% to 5.6% in 2021, revised up by 0.2% to 4.0% in 2022.

Source: BIMB Securities Research - 15 Mar 2021