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MONTHLY NEWS SCAN Tinjauan Berita Bulanan Compiled by IDS Vol. 24 Issue 1 IDS Online http://www.ids.org.my 1 – 31 January 2019 HIGHLIGHTS stimulus plan, investors are looking BOJ leaves stimulus unchanged, cuts FOCUS once again toward Beijing as the inflation outlook again: The Bank of world economy heads for a Japan left monetary policy • World Bank warns of ‘darkening slowdown, or worse, in 2019. unchanged as it cut its inflation Booming China has accounted for outlook once again, underscoring skies’ for global economy about a third of the growth in the how far away its price target is and • IMF warns trade tensions could global economy in recent years. (11 how few options the central bank has hit growth January, Reuters) for drawing closer. The BOJ • Malaysia’s economy to grow maintained its yield curve-control 4.7pc to RM1.48 trillion in 2019 Oil prices edge down as global program and asset purchases, it said • More global banks revise growth worries threaten demand: in a statement Wednesday, a result downwards Brent forecast; Oil prices edged lower on Tuesday as predicted by all but one of 50 Malaysia’s 2019 Budget concerns over global economic economists surveyed by Bloomberg. recalibration may be imminent growth stoked fears over future The bank lowered its inflation • Sabah reserves grew over RM4 demand. International Brent crude oil forecast for a fourth consecutive time billion last year futures were down 10 cents, or 0.2 in its quarterly outlook report. (23 • New ministry to improve Sabah percent, at $62.64 by 0106 GMT. January, Bloomberg) education system – CM They closed down 0.1 percent on Monday. U.S. West Texas Singapore’s Dec exports post worst INTERNATIONAL Intermediate (WTI) crude futures fall in 2 years: Singapore’s exports ANTARABANGSA were at $53.70 per barrel, down 0.1 recorded their worst decline in more percent, or 4 cents. (22 January, than two years in December as World Bank warns of ‘darkening Reuters) shipments of electronics and skies’ for global economy: The pharmaceuticals plunged, official World Bank is warning of increasing China posts strongest export data showed on Thursday. The risks, or what it calls “darkening growth in seven years in 2018 unexpected decline comes despite skies”, for the world economy. In its despite trade war: China’s exports ongoing trade talks between the annual assessment of global rose 9.9 percent in 2018, its strongest United States and China to defuse prospects the Bank predicts trade performance in seven years, trade tensions. Many economists continued, though somewhat slower, despite growing disruptions from an expect the dispute to hurt trade- growth this year and next. The escalating trade war with the United dependent Singapore in months to Bank’s forecast for the global States, customs data showed on come. Non-oil domestic exports in economy is expansion this year of Monday. Imports increased 15.8 December fell 8.5 percent from a 2.9% and 2.8% in 2020. But percent last year, resulting in a trade year earlier, data from the trade overhanging the broadly favourable surplus of $351.76 billion, the agency Enterprise Singapore showed, outlook are rising concerns that could country’s lowest since 2013. (14 slowing further from a revised 2.8 mean economic performance falls January, Reuters) percent decline the month before. (17 short. (8 January, BBC News) January, Reuters) Germany isn’t floundering, despite Eurozone’s economic outlook IMF warns trade tensions could hit the data: After Tuesday’s darkens as growth risks increase: growth: The International Monetary disappointing industrial output data, The clouds seem to be gathering for Fund has warned that escalating trade the German economy could be the eurozone’s economy. At a news tensions could undermine global headed for a technical recession — conference after a policymaking economic growth. In a new report on two consecutive quarters of negative meeting on Thursday, European the world economic outlook, the IMF growth. “Technical,” however, is the Central Bank (ECB) president Mario also warns of risks from a no-deal operative word; the country isn’t Draghi described an outlook that is Brexit. For the world economy, the really in trouble, at least not yet, and becoming more overcast. Economic IMF is now predicting growth of the worrying data are driven by a data, he said, had been weaker than 3.5% in 2019. In October, it forecast single regulatory change that has expected, and the risks to growth 3.7%. (21 January, BBC News) wreaked havoc on the domestic car have increased. There was a clear industry. The German government hint in his remarks that it will take As world economy stumbles into reported a 1.9 percent month-on- even longer than the ECB has been 2019, eyes turn to China: Ten years month drop in industrial production, suggesting before it starts to raise after China helped stave off the threat the biggest since August 2015. (8 interest rates. (24 January, BBC of a global depression with a huge January, Bloomberg) News) 1 – 31 January 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 from October but increased by 0.5 of positive. I believe that the FDI for NATIONAL a percentage point from a year ago this year would be higher than last NASIONAL which was at 67.9%. “The number of year,” he said. He was speaking to labour force in this month rose 2.5% reporters on the sidelines of the Malaysia’s economy to grow 4.7pc against November 2017 to 15.46 launch of Grab’s new office in to RM1.48 trillion in 2019: The million persons. During the same Bandar Utama here in Petaling Jaya World Bank forecasted Malaysia’s period, employed persons also yesterday. (29 January, The Star) RM1.41 trillion economy to grow at increased 2.5% to 14.94 million 4.7 per cent this year and to slow persons,” Uzir said in the statement MIER expects business conditions down to 4.6 per cent for next year. In on the labour force, employment and to improve in Q1: The Malaysian its January 2019 Global Economic unemployment. (15 January, The Institute of Economic Research Prospects report titled ‘Darkening Star) (MIER) says business conditions are Skies’, the World Bank said likely to improve slightly in the first Malaysia’s lower public investment M’sia on track to restore quarter of this year. Executive is weighing on growth, reflecting the financial health in three years: director Dr Zakariah Abdul Rashid completion of several infrastructure Finance Minister Lim Guan Eng said said although its fourth-quarter projects and a more prudent approach Malaysia is on track to restore its Business Condition Index, which toward new ones. The bank said in financial health within three years tracks domestic manufacturing contrast to the regional trend, import after it had been damaged by the activities, dropped to below the 100- growth in Malaysia has been weak, 1Malaysia Development Bhd point threshold to 95.3 points, the reflecting weak demand for capital scandal. In a statement, Lim Expected Index (EI) increased goods imports combined with lower highlighted that the major marginally on expectations of imports of intermediate goods. (9 international credit rating agencies – production and export sales. During January, Business Times) Moody’s, Fitch Ratings and S&P the quarter, the EI stood higher at Global Ratings – had all affirmed the 112.5 points, up by 16 points. (31 More global banks revise January. The Star) country’s credit ratings in their recent downwards Brent forecast; reports. Lim also noted that these November industrial production Malaysia’s 2019 Budget rating agencies had admittedly index above forecast at 2.5%: The recalibration may be imminent: expressed concerns about the country’s industrial output in More leading global banks are now government’s narrowing revenue November 2018 rose faster than following Goldman Sach’s footstep base, following the removal of the expected by 2.5%, above a to revise downwards the average goods and services tax (GST) that Bloomberg survey of 2.3%, Brent crude oil price forecast to was replaced with the sales and according to the Statistics US$60-US$65 a barrel for 2019. This service tax (SST). (24 January, The Department. Its chief statistician has pushed the consensus target down Star) Datuk Seri Mohd Uzir Mahidin said to US$70 a barrel for this year from on Friday the growth in November US$72 previously. The forecasters ‘Inflation remains moderate’: Inflation has remained moderate 2018 was supported by the increase are basing this on an additional key in manufacturing index (3.6%) and factor, the United States’ sanction since the abolition of the goods and services tax last June, despite the electricity index (3.2%). The mining against Iran, which is expiring in index declined by 0.7%.“The May and another major uncertainty in sales and service tax being reintroduced. Data from the Statistics manufacturing sector output the oil industry. The industry was expanded by 3.6% in November 2018 facing uncertainties due to the Department showed that inflation, measured by the change in the after registering a growth of 5.4% in ongoing trade war between China and October 2018. (11 January, The Star) United States, they said. There was consumer price index (CPI), rose at a strong fear in the market that demand slower-than-expected pace of 0.2% Malaysia launches ‘Love my palm for oil may continue to be lacklustre year-on-year (y-o-y) last December. oil’ campaign: The Ministry of moving forward, they added. (14 The figure was lower than the 0.3% Primary Industries announced a year- January, Business Times) increase projected in long “Love MY Palm Oil” campaign a Bloomberg poll of 20 economists.