KUALA LUMPUR: CIMB Economics Research sees sustained expansion for the Malaysian economy in the coming months but this would be at a more moderate pace.
It said on Wednesday, June 22 the indicators -- leading index, coincident index and lagging index -- suggest tougher economic conditions in 2Q and early 3Q amid strengthening external headwinds. The short-term impact of Japan's supply chain disruption is coming through.
'Meanwhile, the resurgence of European sovereign debt crisis and more dismal US economic outlook pose greater downside risks.
'We remain optimistic that domestic demand will be the prime mover of GDP growth, underpinned by stable labour market conditions and the stepping up of total investment as the Economic Transformation Programme moves into high gear. As such, we expect the economy to expand by 4%-4.5% in 2Q and 6%-6.5% in 2H, or 5.5% for 2011,' it said.
CIMB Economics Research said Malaysia's leading index (LI) recorded a higher annual growth of 1.6% in April (0.7% in March). However, on a month-on-month comparison, the LI fell 0.7% to 110.3 points in April (+0.3% in March), mainly due to the contraction in Bursa Malaysia INDUSTRIAL INDEX [] (-0.2%), real imports of semiconductors (-0.2%) and number of housing permits approved (-0.2%).
'The diffusion index of LI dropped below the benchmark 50 level to 28.6 in April (57.1 in March), reflecting tougher economic conditions in 2Q and early 3Q amid strengthening external headwinds,' it said.
The LI comprises of real money supply, Bursa Malaysia Industrial Index, real imports of semiconductors, real imports of other basic precious and other non-ferrous metal, number of housing permits approved, expected sales value (manufacturing) and number of new companies registered.
CIMB Economics Research said the coincident index (CI) grew at a slower pace of 3.6% on-year in April (4.3% in March), sustaining a four-month decelerating trend.
On a month-on-month basis, the CI contracted by 0.6% (+0.6% in March) as manufacturing activities faltered.
Components which marked a significant decline were industrial production index (-0.3%), total employment in manufacturing sector (-0.2%) and capacity utilisation in manufacturing sector (-0.1%).
'However, the diffusion index of CI still holds above the 50 benchmark level of 66.7 in April (83.3 in March), pointing to sustained economic growth albeit at a moderate pace,' it said.
The components of the CI are total employment (manufacturing), real salaries and wages (manufacturing), industrial production index, real contributions (EPF), capacity utilisation (manufacturing) and volume index of retail trade.
CIMB Economics Research said the growth of lagging index (LGI) almost doubled to 5.2% in April (2.7% in March).
Compared with the previous month, LGI rose 2.5% (1.2% in March), augmented by the higher number of investment projects approved (+0.8%), exports of natural gas and crude oil (+0.7%) and unit labour cost in the manufacturing sector (+0.6%).
''
'The diffusion index for LI fell below the benchmark 50 level in April, suggesting tougher economic conditions in 2Q and early 3Q amid strengthening external headwinds,' it said.
It said on Wednesday, June 22 the indicators -- leading index, coincident index and lagging index -- suggest tougher economic conditions in 2Q and early 3Q amid strengthening external headwinds. The short-term impact of Japan's supply chain disruption is coming through.
'Meanwhile, the resurgence of European sovereign debt crisis and more dismal US economic outlook pose greater downside risks.
'We remain optimistic that domestic demand will be the prime mover of GDP growth, underpinned by stable labour market conditions and the stepping up of total investment as the Economic Transformation Programme moves into high gear. As such, we expect the economy to expand by 4%-4.5% in 2Q and 6%-6.5% in 2H, or 5.5% for 2011,' it said.
CIMB Economics Research said Malaysia's leading index (LI) recorded a higher annual growth of 1.6% in April (0.7% in March). However, on a month-on-month comparison, the LI fell 0.7% to 110.3 points in April (+0.3% in March), mainly due to the contraction in Bursa Malaysia INDUSTRIAL INDEX [] (-0.2%), real imports of semiconductors (-0.2%) and number of housing permits approved (-0.2%).
'The diffusion index of LI dropped below the benchmark 50 level to 28.6 in April (57.1 in March), reflecting tougher economic conditions in 2Q and early 3Q amid strengthening external headwinds,' it said.
The LI comprises of real money supply, Bursa Malaysia Industrial Index, real imports of semiconductors, real imports of other basic precious and other non-ferrous metal, number of housing permits approved, expected sales value (manufacturing) and number of new companies registered.
CIMB Economics Research said the coincident index (CI) grew at a slower pace of 3.6% on-year in April (4.3% in March), sustaining a four-month decelerating trend.
On a month-on-month basis, the CI contracted by 0.6% (+0.6% in March) as manufacturing activities faltered.
Components which marked a significant decline were industrial production index (-0.3%), total employment in manufacturing sector (-0.2%) and capacity utilisation in manufacturing sector (-0.1%).
'However, the diffusion index of CI still holds above the 50 benchmark level of 66.7 in April (83.3 in March), pointing to sustained economic growth albeit at a moderate pace,' it said.
The components of the CI are total employment (manufacturing), real salaries and wages (manufacturing), industrial production index, real contributions (EPF), capacity utilisation (manufacturing) and volume index of retail trade.
CIMB Economics Research said the growth of lagging index (LGI) almost doubled to 5.2% in April (2.7% in March).
Compared with the previous month, LGI rose 2.5% (1.2% in March), augmented by the higher number of investment projects approved (+0.8%), exports of natural gas and crude oil (+0.7%) and unit labour cost in the manufacturing sector (+0.6%).
''
'The diffusion index for LI fell below the benchmark 50 level in April, suggesting tougher economic conditions in 2Q and early 3Q amid strengthening external headwinds,' it said.
No comments:
Post a Comment