• Malaysia unemployment rate dropped to 4.8% in February

• Foreign portfolio inflows persisted in March as foreigners continued to snap up Malaysian debt securities by RM5.9bn

• Malaysia’s distributive trade fell for the fifth straight month

• The IPI continued to expand, rising by 1.5% yoy, after a 1.2% yoy rise in January 2021.

• International Monetary Fund (IMF) upgraded global growth projection.

• Reserve Bank of Australia (RBA) decided to maintain the current policy settings

MALAYSIA ECONOMY

• The International Monetary Fund (IMF) maintains its projection on Malaysia’s growth this year at 6.5% and 6.0% in 2022. The expansion will be driven by a strong recovery in the manufacturing and construction sectors.

• The unemployment rate dropped to 4.8% in February as compared to the previous month. The number of unemployed persons declined by 0.6% or 5.0k persons to register 777.5k unemployed persons. The unemployment rate for February was higher by 1.5 ppt year-on-year, with the number of unemployed persons registering an additional of 252.3k persons. Employed persons continued to increase marginally 0.2% mom or 33.3k persons to 15.27m persons in February 2021 for the third straight month. However, year-on-year comparison, the indicator continued with a downward trend for eleventh consecutive months whereby the number of employed persons declined 0.5% during the month.

• Foreign portfolio inflows persisted in March as foreigners continued to snap up Malaysian debt securities by RM5.9bn (Feb: +RM6.2bn; Jan: +RM3.0bn). This marks the eleventh month of net foreign inflows entering domestic bonds which helped to offset continued net foreign outflows from Malaysian equities. Foreign inflows primarily entered Malaysian government securities that lifted foreign holdings of MGS and GII by RM4.4bn to RM215.3bn of total outstanding to reach it highest record (previous high was in October 2016: RM214.9bn).

• Malaysia’s distributive trade fell for the fifth straight month to record -0.9% yoy in February 2021 but at a softer pace than the previous month (Jan’21: -2.6%). Malaysia’s total motor vehicle sales recorded a smaller negative growth of 0.1% after a steep fall of -12.4% in January. Meanwhile, retail trade shrank 2.1% yoy in February 2021, while wholesale trade fell marginally by 0.1%.

• Malaysia's industrial production grew further in February. The IPI continued to expand, rising by 1.5% yoy, after a 1.2% yoy rise in January 2021. This was the third straight month of increase in industrial output, as the economy gradually recovered from recession, with strong output in both export and domestic oriented industry in manufacturing sector. The growth in production was mainly driven by improving production of manufacturing sector. However, both mining and electricity output fell faster as compared to the previous month.

GLOBAL ECONOMY

• The International Monetary Fund (IMF) had released the new growth forecasts for the global economy last week. The global economy is expected to grow by 6% in 2021, up by 0.5ppts from 5.5% estimated in January. For 2022, IMF saw global growth at 4.4%, higher than the 4.2% previously projected. Meanwhile, advanced economies are expected to expand 5.1% this year, compared with the 4.3% previously seen. Emerging market and developing economies will grow 6.7%, up from 6.3%.

Source: BIMB Securities Research - 12 Apr 2021