MONTHLY NEWS SCAN

Tinjauan Berita Bulanan Compiled by IDS

Vol. 25 Issue 7 IDS Online http://www.ids.org.my 1 – 31 July 2020

HIGHLIGHTS 666.55 billion yuan ($95.27 billion) - 1998 and steeper than a 2.3 per cent FOCUS marking the quickest profit growth fall seen in a Reuters poll. (23 July, since March 2019. May marked the The Straits Times) sector’s first monthly growth in G20 officials pledge to keep • earnings since November, before the Coronavirus: UK economy ‘might cooperating to bolster global onset of the coronavirus pandemic. not recover until 2024’: The UK economy (27 July, Reuters) economy could take until 2024 to • EU sees deeper recession, less steep rebound for euro zone return to the size it was before the • leads APEC consensus to U.S. economic growth revised coronavirus lockdown, according to ease movement of essential goods slightly down in 2019: U.S. analysis from the EY Item Club. The • Malaysia’s current account to economic growth slowed a bit more forecasters, who use a similar rebound in 2021 than previously estimated in 2019 as economic model to the Treasury, • Big demand for -made the sugar high from the Trump suggest unemployment will rise to 9% cooking oil – CM administration’s $1.5 trillion in tax from 3.9%. They also estimate the • IDS, ASB to set up training centre cuts faded over the final year of a economy will shrink by 11.5% this for oil & gas industry record-long expansion that came to an year, worse than the 8% they abrupt end in February in the face of predicted only a month ago. (27 July, INTERNATIONAL the global coronavirus pandemic. The BBC News) ANTARABANGSA Commerce Department said recently gross domestic product increased France sees record 13.8 per cent G20 officials pledge to keep 2.2% last year, revised down from the GDP plunge in second quarter: cooperating to bolster global previously estimated 2.3% and also France’s economy contracted by a economy: Finance officials from the reflective of consumer spending that record 13.8 per cent in the second Group of 20 major economies vowed had begun to show signs of fatigue quarter under the impact of to continue using “all available policy heading into 2020. The 2019 growth coronavirus lockdowns, the national tools” to fight the coronavirus rate was the slowest expansion since statistics institute INSEE.The pandemic and bolster the global 2016. (30 July, Reuters) seasonally-adjusted quarter-on- economy, warning that the outlook quarter drop in gross domestic product remains highly uncertain. G20 finance Japan’s sinking exports raise risks (GDP) was better than forecast but ministers and central bankers, in a of prolonged economic downturn at worse than the performance of most of communique issued after a virtual home and overseas: Japan’s exports its eurozone peers. “GDP’s negative meeting recently, said the global plunged at a double-digit pace for the developments in first half of 2020 is economy would recover as economies fourth month in a row in June, backing linked to the shut-down of ‘non- signs the coronavirus crisis has gradually reopen, but said further essential’ activities in the context of actions were needed to ensure growth. knocked the economy into its worst postwar recession and raising the the implementation of the lockdown (19 July, Reuters) between mid-March and the spectre of a longer and more painful global downturn. U.S.-bound beginning of May,” INSEE said in a EU sees deeper recession, less steep statement. (31 July, The Straits rebound for euro zone: The euro Japanese shipments nearly halved again due to plummeting demand for Times) zone economy will drop deeper into recession this year and rebound less cars and autoparts, while exports to China remained weak, pointing to the Australian employment suffers steeply in 2021 than previously setback from second coronavirus thought, the European Commission absence of a strong growth engine for wave: Australian employment fell 1.1 forecast, with France, Italy and Spain the world economy. (20 July, Reuters) struggling the most due to the per cent between mid-June and mid- COVID-19 pandemic. (7 July, South Korea enters recession as July, weekly data showed, with the Reuters) exports plunge by most since 1963: biggest loss coming from the South Korea plunged into recession in southeastern state of Victoria, which China’s industrial profit growth the second quarter in its worst is grappling with a fresh wave of quickens, signals firming economic economic decline in more than two coronavirus infections. The recovery: Profits at China’s industrial decades as the coronavirus pandemic Australian Bureau of Statistics (ABS) firms rose for a second straight month battered exports and social distancing said total payroll jobs decreased 2.2 and at the fastest pace in over a year, curbs paralysed factories. Asia’s per cent in Victoria alone as additional adding to signs the country’s fourth-largest economy shrank by a Covid-19 restrictions were re- economic recovery from the seasonally adjusted 3.3 per cent in the introduced following an “alarming” coronavirus crisis is gaining June quarter from three months rise in cases. The state reported 384 momentum. The statistics bureau said earlier, the Bank of Korea said new Covid-19 cases on July 28, on top that profits at China’s industrial firms recently. That is the sharpest of a record 532 the previous day. (28 rose 11.5% year-on-year in June to contraction since the first quarter of July, The Straits Times) 1 – 31 July 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 Malaysia Plan, has established a the latest technology in the NATIONAL Facilitation Fund of RM20 billion to automotive supply chain. (22 July, NASIONAL catalyse private investment in Business Times) nationally strategic areas,” he said in Malaysia leads APEC consensus to opening speech at the Invest Malaysia PPI for local production slips 4.0 ease movement of essential goods: 2020. (20 July, Business Times) pct in June: Malaysia’s Producer Asia-Pacific Economic Cooperation Price Index (PPI) for local production (APEC) economies under the Headline inflation falls in June over slipped 4.0 per cent in June 2020 to leadership of Malaysia has reached a domestic fuel prices: The headline 100.30 compared with 104.5 in the consensus to ease the movement of inflation for June 2020 decreased to - same month last year. The essential goods, according to the 1.9 per cent in June compared with - Department of Statistics Malaysia Ministry of International Trade and 2.9 per cent in May, driven largely by (DOSM) said out of 1,063 items Industry (MITI). It said APEC the higher domestic retail fuel prices covered in the PPI in June 2020, 53.7 Ministers Responsible for Trade during the month. Bank Negara per cent showed a decline, 39.5 per (MRT), in a virtual meeting chaired Malaysia (BNM) in its monthly cent recorded price increase, while 6.8 by the Senior Minister and Minister of highlights said that the risk of per cent were unchanged. Chief International Trade and Industry deflation remains contained as statistician Datuk Seri Dr Mohd Uzir Datuk Seri , underlying inflation, as measured by Mahidin said the mining index issued a statement that clearly outlines core inflation, increased slightly to 1.2 registered the highest rate of decline at APEC commitment to support the per cent. “The higher share of 42.5 per cent, followed by work of the World Trade Organisation consumer price index items recorded manufacturing (-1.2 per cent), water (WTO) and advancing the efforts in month-on-month price increases supply (-1.2 per cent) and electricity trade facilitation initiatives as well as (June: 44 per cent; May: 36 per cent), & gas supply (-0.6 per cent). (29 July, strengthens the resilience of suggesting a further normalisation of ) supply chains in APEC.(27 July, price pressures,” it said. (30 July, Bernama) Bernama) Manufactured, agriculture goods

record double-digit growth in June: Malaysia’s current account to Exports grows 8.8pct in June, trade rebound in 2021: Malaysia’s current expands 2.2pct: Malaysia’s exports Exports of manufactured goods in account surplus, which has backed the rebounded in June to post its highest June 2020, which made up 87.5 per economy against its long-running monthly trade surplus ever recorded. cent of total exports, picked up by fiscal deficit, should recover to up to June exports grew 8.8 per cent year- 13.7 per cent year-on-year (y-o-y) to three per cent next year, said S&P on-year (y-o-y) to RM82.87 billion RM72.48 billion, according to the Global Ratings. But before that, the while total trade expanded by 2.2 per Ministry of International Trade and surplus is expected to shrink to cent to RM144.84 billion, Industry (MITI). It said the expansion between 1.0 per cent and 2.0 per cent International Trade and Industry was due mainly to higher demand of the country's gross domestic Ministry said. Imports dropped 5.6 per for electrical and electronics products, product (GDP) this year. This would cent to RM61.98 billion, resulting in a rubber products, other manufactures be due to lower prices of oil and gas trade surplus of RM20.89 billion in particularly solid-state storage and palm oil, said S&P Global June, a growth of 98.7 per cent y-o-y. devices, optical and scientific sovereign and international public The ministry said trade increases were equipment, machinery, equipment and finance ratings director and lead recorded primarily with China, the parts, wood products, iron and steel analyst for Asia Pacific Andrew US, Hong Kong and Vietnam. Major products, as well as manufactures of Wood said. The country’s current exports in June continued to be led by metal (28 July, Bernama) account balance reportedly came in at electrical and electronics (E&E) 2.9 per cent of GDP for the year until products, valued at RM32.55 billion Malaysia trade with FTA partners the first quarter. The figure was and constituted 39.3 per cent of total increased 2.9 pct to RM95.83 bln in broadly steady from the average exports. (28 July, Business Times) June 2020: Malaysia’s trade with current account surplus of 2.7 per cent Free Trade Agreement (FTA) of GDP in the preceding five years. (2 MITI re-strategises action plan in partners, which accounted 66.2 per July, Business Times) NAP 2020: The Ministry of cent of Malaysia’s total trade, International Trade and Industry increased 2.9 per cent to RM95.83 Govt approves RM14.2bil of (MITI) is re-strategising the action billion year-on-year (y-o-y) in June projects under facilitations funds: plan in implementing the National 2020. In a statement, the Ministry of The government has so far approved Automotive Plan (NAP) 2020 which International Trade and Industry RM14.2 billion of 320 Facilitations aims to make the nation's automotive (MITI) said exports to FTA partners Fund projects, creating about RM230 sector more competitive and amounted to RM55.87 billion, surged billion worth of economic activities. developed. MITI’s minister Datuk 10.1 per cent y-o-y but imports Minister in the Prime Minister’s Seri Mohamed Azmin Ali said the Department in charge of the economy move will help expedite the revival of declined 5.6 per cent to RM39.96 Datuk Seri said the automotive sector through the billion. “Increases in exports were the fund, which was under the Public- option of investments in a few sectors recorded to Hong Kong SAR, up by Private Partnership (PPP) approach, that made up the automotive sector. 31 per cent to RM6.03 billion, had been the catalyst for greater The investment promotion will help attributed mainly to higher exports of private sector participation in the the high technology vehicle and E&E products, Pakistan (73.2 per Malaysian economy. “PPP is a environmentally friendly segment, the cent), Turkey (1.7 per cent) and Chile catalyst for broader sector reform and development of local talent, the (16.3 per cent). Compared to May greater private sector participation. enhancement in the high-value 2020, trade, exports and imports were The government in its game changing manufacturing especially for after- up by 25.6, 30.7 and 19.2 per cent, strategies under the 10th and 11th sales products and the application of respectively. (28 July, Bernama) 1 – 31 July 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 2

domestic economic activities in Gov’t allocates over RM1 billion to LOCAL Sabah, said Sabah Rural Development upgrade dilapidated schools in TEMPATAN Minister Datuk Ewon Benedick. For Sabah: The Education Ministry has this, he said he will continue to allocated RM1.252 billion to upgrade Big demand for Sabah-made support the development of and redevelop dilapidated schools in cooking oil – CM: There is a big community-based tourism, especially Sabah, the was told demand for the palm oil-based in Kadamaian. The tourism industry in recently. Senior Minister of cooking oil produced by Sabah as it is Sabah was greatly affected following Education Dr Radzi Jidin said the now being exported to other countries the COVID-19 pandemic, especially allocation under the 11th Malaysia including the Middle-East countries, when the country’s borders were Plan (11MP) (2016-2020) was for the Arab, Africa, Korea and the closed when the Movement Control upgrading and redevelopment works Philippines. Chief Minister Datuk Seri Order (MCO) was imposed. of 237 dilapidated schools in the state, Panglima said other “Concerned about the impact of the while other dilapidated schools would countries had found that the ‘GOLD’ pandemic on the economic sector, the be upgraded under the 12MP and brand cooking oil produced by a Sabah state government has provided subject to government financial factory under a joint venture between two assistance packages capability. “The ministry also uses the Sawit Kinabalu Group and Syarikat totalling RM910 million which were allocation from the Special Intipati Minyak Sdn Bhd has high announced by Chief Minister, Datuk Programme for the Maintenance of quality, thus creating a big demand. (5 Seri Mohd Shafie Apdal. (21 July, Educational Institutions for July, ) ) maintenance purposes, based on priorities according to the impact IDS, ASB to set up training centre Sabah now exporting milkfish: The scale,”. (16 July, The Borneo Post) for oil & gas industry: The Institute aquaculture industry has great potential with boneless fish in high At least 115 new telco towers to be for Development Studies built in Sabah: The government is (Sabah), IDS and Asian Supply Base demand by countries such as Sdn. Bhd. (ASB) will collaborate on Indonesia, the Philippines and Dubai, implementing various initiatives to establishing an Integrated Training according to State Agriculture and improve broadband service coverage and Development Centre in Sabah to Food Industry Minister, Datuk Junz and quality nationwide in an effort to serve various fields, particularly the Wong. “Chief Minister Datuk Seri narrow the urban-rural digital divide. oil & gas industry in the state. Mohd Shafie Apdal has asked me to Towards that end, Communications An ASB delegation led by its Chief look into ways to grow this industry and Multimedia Minister Datuk Executive Officer, Datuk Harris and its downstream sectors so that said his ministry Annuar Tan held a meeting with more Sabahans could participate in is holding a planning session with the IDS team which included its milkfish farming,” he said. “With industry players through the National more locals participating in the chairman, Tan Sri Simon Sipaun Digital Infrastructure Workshop and CEO, Anthony Kiob at aquaculture sector, we will be able to meet the demand of the export (Makmal), which runs from July 13 to Wisma SEDIA, .. Aug 14, led by the Malaysian Recalling his past experience as the markets and in turn enable Sabahans Chairman of ASB (1989-1994), Tan to generate higher incomes,” he Communications and Multimedia Sri Simon expressed his joy in ASB’s added. The downstream processing of Commission (MCMC). Saifuddin said tremendous financial and physical milkfish has enabled Sabah based in Sabah, for example, at least 115 progress achieved over the years Champ Quality Seafood to produce new telecommunication towers, under its capable and professional export quality fish packages which which include broadband services, leadership. (8 July, New Sabah have high demand overseas. (30 July, will be built under the initiative to Times) ) provide public cellular services. (16 July, Daily Express) Mizuho Bank berminat jalin RM2m allocated for various rural kerjasama dengan Bank entrepreneur devt programmes: RM20 mln grant to help micro, Pembangunan Sabah: Bank Jepun, The State Government has allocated cottage entrepreneurs: The State Mizuho Bank berminat untuk RM2 million to implement various Government has allocated a RM20 menjalin kerjasama dengan Bank rural entrepreneurship development million in the form of grant to help Pembangunan Sabah untuk menarik programmes and enhance the rural micro and cottage entrepreneurs in lebih ramai pelabur yang berpotensi communities economic development rural Sabah. Trade and Industry dari negara itu ke Sabah. Ketua this year. State Rural Development Minister Datuk Seri Panglima Wilfred Pegawai Eksekutif Mizuho Bank Minister Datuk Ewon Benedick said, Madius Tangau said one of the (Malaysia) Bhd Shojiro Mizoguchi of the total amount, RM1 million was conditions set for applicants was that berkata langkah itu akan allocated for Rural Entrepreneur they must be Malaysian citizens from membolehkan Mizuho memudahkan Development (PUD), and the rest was Sabah. He also said that they must be dan membawa pelabur Jepun ke for the One District One Product rural micro and cottage entrepreneurs (SDSP) programme. “To date, the Sabah. “Kami adalah bank Jepun. with annual income of not more than Kami telah beroperasi selama 30 Ministry has successfully produced 61 entrepreneurs from all over Sabah in RM50,000. “The applicants must tahun di Malaysia dan sembilan tahun possess a business license and have di . Kami cuba various fields including handicrafts, attained a letter of confirmation from mempelawa pelabur Jepun ke Sabah. food processing, health, beauty and (8 July, New Sabah Times) honey bee farming,” he said after the Village Community officiating the closing ceremony of Administration Committee (MPKK) RM10 mln boost to revive the traditional clothing sewing and chairman to testify the production community-based tourism: food processing course, in Mensiang, activities or services that they are Community-based tourism, especially near here, Wednesday. (24 July, Daily rendering,” he said. (21 July, The in rural areas, can help revive Express) Borneo Post) 1 – 31 July 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 3

SELECTED FACTS AND FIGURES FAKTA MUTAKHIR

Malaysia’s External Trade Statistics Bulletin, June 2020

(Source: 28 July, Department of Statistics Malaysia)

Malaysia’s Economic Indicators: Leading, Coincident & Lagging Indexes, May 2020

(Source: 23 July, Department of Statistics Malaysia)

Malaysia’s Producer Price Index, June 2020

Table 1: Producer Price Index (2010=100) Local Production by Sector (MSIC 2008), Malaysia:

(Source: 29 July, Department of Statistics Malaysia) 1 – 31 July 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 4 Malaysia’s Small and Medium Enterprises (SMEs) Performance 2019

(Source: 29 July, Department of Statistics Malaysia)

Malaysia’s Consumer Price Index, June 2020

Table 1: Percentage Change for Subgroup Food & Non-Alcoholic Beverages

(Source: 22 July, Department of Statistics Malaysia)

1 – 31 July 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 5