Weekly Economic Review

Last week’s highlights

• Ministry of Finance Malaysia (MOF) had released its 70th LAKSANA report
• Malaysia’s PPI local production rose by 11.3% in August 2021
• The FBM KLCI fell by 0.49% or 7.58 points for the week to settle at 1,524.48 points
• US PCE price index rose by 4.3% yoy in August, up from 4.2% in July
• Euro area annual inflation is expected to be 3.4% yoy in September
• Vietnam GDP contracted by 6.17% yoy in the 3Q21, the slowest quarter in two decades
• BOT kept the policy rate unchanged, while CNB, Colombia and Mexico hike
• Week Ahead Economic Review

MALAYSIA ECONOMY

According to the Ministry of Finance Malaysia (MOF) 70th LAKSANA report, under technical and digital adoption for SMEs and mid-tier companies (MTC) programs, a total of RM83.3m has been distributed to 13,884 recipients. For the SME digitalization grant, a total of RM102.62m has been disbursed to 36,111 SMEs. Under Indian Community Entrepreneur Development Scheme, a total of RM19.96m was disbursed to 818 eligible SMEs. For the Danajamin Prihatin Guarantee Scheme (DPGS), the total guarantees approved were RM2.015bn for 54 companies. Besides, a total of RM1.024bn had been channeled based on 2,770,340 claims to the front-liners as allowance. The Social Security Organization (SOCSO) has paid compensation of RM11.19m to workers infected with COVID-19 at work involving 15,036 cases as of September 18, 2021. The disbursed amount of wage subsidy 1.0 and 2.0 schemes stood at RM12.937bn and RM1.381bn. For wage subsidy 3.0 and 4.0, a totaled RM3.03bn and RM928 were channeled to the employers as of 17 September 2021.

Malaysia’s export growth accelerated to 18.4% yoy in August from RM80.8bn in August 2020 to RM95.6bn. The stronger export performance was underpinned by the lower base effect, sustained global demand, and narrowed negative output gap reflecting from relaxing COVID-19 containment measures. Meanwhile, imports growth moderated by 12.5% to RM74.2bn in August compared to 24.0% growth in the previous month. Trade balance recorded a surplus of RM21.4bn in August, an increase of 44.7% from RM14.8bn from a year ago.

The Producer Price Index (PPI) local production rose by 11.3% in August 2021, down from an 11.7% rise in the previous month. The performance was the seventh month of an increase in the inflation cost. The growth was driven by the rise in all sub-indexes except water supply: the mining index (51.8%); agriculture, forestry & fishing index (27.6%); manufacturing index (7.1%); electricity & gas supply (0.4%). Water supply slipped by -0.4% compared to a 1.3 % rise in July. Meanwhile, PPI by stage processing, the index of crude materials for further processing moderated from 35.8% to 30.9% in August 2021. The index of Intermediate materials, supplies & components increased by 11.2%. However, the finished goods recorded deflation of 1.3% in August, up from a 0.4% drop in July. From January to August 2021, producer inflation rose by 8.2% compared to the same period a year ago.

Source: BIMB Securities Research - 4 Oct 2021