• Weekly Economic Review Last week’s highlights
• Ministry of Finance Malaysia (MOF) had released its 66th LAKSANA report
• The FBM KLCI fell by 0.06% or 0.97 points for the week to settle at 1,589.19 points
• US manufacturing PMI posted 61.1 in August, down from 63.4 in July
• US unemployment rate dropped to a 17-month low of 5.2% in August
• Euro area inflation is expected to be 3.0% yoy in August
• UK nationwide house price index (HPI) rose by 11.0% in August 2021
• Australia’s GDP expanded by 9.6% yoy in 2Q21
• Central bank of Chile raised the policy rate by 75 basis points
• Week Ahead Economic Review

MALAYSIA ECONOMY

According to the Ministry of Finance Malaysia (MOF) 66th LAKSANA report, under BNM-SMEs soft loans funds, a total of RM12.36bn was approved to the 26,048 applicants. Meanwhile, under the tourism sector financing PENJANA, 337 applications were approved with total funding of RM66.9m. Under the Agrobank Microcredit Financing Scheme, a total of 15,058 agricultural Micro SMEs had received RM187.74m fund. For technical and digital adoption for SMEs and midtier companies (MTC), a total of RM82.27m has been distributed to 13,884 recipients. Malaysian government introduced various stimulus packages to support households which includes Employees Provident Fund (EPF) withdrawal schemes; i-LESTARI, i-SINAR, and i-CITRA. As of the end of April 2021, EPF had disbursed RM20.8bn under the i-LESTARI scheme to 5.27 million account holders. Meanwhile, as of 19 August 2021, i-SINAR withdrawal stood at RM58.4bn, involving 6.57 million applicants. For i-CITRA, the credited amount to applicants has reached RM4.6bn, while the approved amount was recorded at RM20.2bn. On the other hand, a total of RM412.6m has been utilized under Jaringan Prihatin Program, which subsidized 3.1 million recipients for subscribing to data plans or device packages. The disbursed amount of wage subsidy 1.0 and 2.0 schemes stood at RM12.929bn and RM1.356bn.

Money supply growth picked up in July 2021 as both broad money (M3) increased to +3.8% yoy (Jun: +3.4%). However, narrow money (M1) moderated to +10.8% yoy compared to +12.2% in June. The rise in M3 growth was in large part driven by the higher banking system’s total outstanding loans growth (Jul’21: +3.0% yoy) and an increase in foreign currency deposits by +14.6% in July. The banking system’s total outstanding loans growth pick up was underpinned by business loans growth (Jul: +1.7% yoy; Jun: +0.8%) which was mainly contributed by the SME segments. Meanwhile, household loans growth moderated slightly to +4.2% yoy in July 2021 (Jun: +5.2%). Consumer credit data mostly weakened in July as the lockdown was prolonged, reflected by household loans indicators i.e., slower growth in outstanding household loans (Jul: +4.2% yoy; Jun: +5.2%) amid doubledigit contraction in household loans applications (Jul: -37.7% yoy; Jun: -2.7%) and household loans approvals (Jul: -34.4% yoy; Jun: +19.6%). Meanwhile, the decline in domestic credit card transactions worsened (Jul: -17.7% yoy; Jun: -15.1%). Consequently, the banking system’s total deposit growth accelerated to +3.9% yoy in July 2021 (Jun: +3.5%).

Source: BIMB Securities Research - 6 Sept 2021