Malaysia’s leading index for October up 6.3% year on year, points to continued economic recovery

PETALING JAYA: Malaysia’s leading index (LI) recorded a 6.3% year-on-year (yoy) growth to 108.7 points in October 2020 from 102.3 points reported for October 2019, driven by Bursa Malaysia’s industrial index with the healthcare index as a catalyst, according to the Department of Statistics’ latest report.

Although the y-o-y figure recorded an increase, the LI saw a 0.7% decline on a monthly basis attributed to a decline in the number of new companies registered (-0.8%) and real Imports of other basic precious & other non-ferrous metals (-0.4%).

The country’s chief statistician Datuk Seri Mohd Uzir Mahidin stated that despite the softening of the index for the reference month, the growth rate of smoothed LI was consistently above trend.

“This suggests that the Malaysian economy is bound to continue its journey to recovery in the early months of 2021,” he said in a statement.

“Furthermore, the hope of Covid-19 vaccine has boosted the waves of optimism globally and sparked a better impact on economic prospects.”

On the flip side, the coincident index (CI), which reflects the overall current economic performance fell 1.1% month-on-month to reach 112 points for October against 113.3 points reported in the previous month.

The department revealed that four out of six components weighed down the performance of CI, particularly the volume index of retail trade which fell by 0.6%.

Other components that dragged the index were retail sale of other goods in specialised stores (-8.4%), retail sale of automotive fuel in specialised stores (-8.3%) and retail sale of cultural & recreation goods in specialised stores (-4.8%).

On a y-o-y basis, the CI for the month fell by 2.4% from 114.8 points reported in the same month of the previous year.

The statistics department noted that the impact from the implementation of the conditional movement control order that started on Oct 13 to cushion the spread of Covid-19 is reflected through the current economic performance.

It pointed out that the restriction on the number of employees affected operating capacity and output even though the economic and business activities are allowed to resume.