Weekly Economic Review

Last week’s highlights

• Ministry of Finance Malaysia (MOF) had released its 71st LAKSANA report
• BNM’s international reserves amounted to USD115.2bn
• The FBM KLCI rose by 2.59% or 39.42 points for the week to settle at 1,563.90 points
• US goods and services trade deficit posted a record high of USD73.3bn in August
• Euro area’s retail trade in August 2021 grew by 0.3% mom
• Japan's household spending fell by 3.0% yoy in August
• Taiwan exports in September rose by 29.2% annually
• RBA and RBI kept the policy rate unchanged, while RBNZ and NBP hike
• Week Ahead Economic Review

MALAYSIA ECONOMY

According to the Ministry of Finance Malaysia (MOF) 71st LAKSANA report, under BNM-SMEs soft loans funds, a total of RM12.46bn was approved to the 26,197 applicants. In supporting the agriculture and food industry, a total of RM202.69m has been disbursed under the Agrobank Microcredit Financing Scheme, benefiting 16,140 agricultural Micro SMEs. For the SME digitalization grant, a total of RM104.76m has been disbursed to 38,276 SMEs. The total guarantees approved under the Danajamin Prihatin Guarantee Scheme (DPGS) were RM2.02bn for 55 companies. Under the CENDANA initiative, a total of RM5.6m has been disbursed to 553 recipients to encourage local artists. Under the Short-Term Employment Programme (MySTEP), a total of 50,501 employees have successfully secured employment as of 10 September 2021. Meanwhile, the Digital Business Services (DBS) program has received a total of 1,942 applicants, while Digital Tech Apprenticeship (DTA) received six applicants. For this year, 108,458 claims amounting to RM92,913,250 have been approved to MySalam recipients. The disbursed amount of wage subsidy 2.0 schemes stood at RM1.386bn.

The international reserves of Bank Negara Malaysia (BNM) amounted to USD115.2bn as of 30 September 2021. The reserves position is sufficient to finance 8.2 months of retained imports and is 1.3 times total short-term external debt. Meanwhile, foreign currency reserves which the sub-components of the international reserves, stood at USD102.5bn, followed by gold (USD2.2bn), International Monetary Fund (IMF) reserves position (USD1.4bn), special drawing rights (SDRs) (USD6.1bn), and other reserve assets (USD3.0bn).

The unemployment rate dipped to 4.6% in August as compared to the previous month. The number of unemployed persons reduced by 3.8% mom or 29.4k persons to register 748.8k unemployed persons. Employed persons rose by 0.53% mom or 81.8k persons to 15.38m persons in August 2021, a reversal of two straight months of reduction. Similarly, on a year-on-year comparison, the indicator continued to post positive growth for the sixth straights month, whereby the number of employed persons rose 1.5% during the month. The employment-to-population ratio which indicates the ability of an economy to create employment picked up by 0.2 ppt to 65.2%. Year-on-year, the employment-to-population ratio remained flat at 65.2%.

Source: BIMB Securities Research - 11 Oct 2021