MONTHLY NEWS SCAN Tinjauan Berita Bulanan Compiled by IDS Vol. 26 Issue 3 IDS Online http://www.ids.org.my 1 – 31 March 2021 HIGHLIGHTS Japan factory output falls in which excludes accommodation and FOCUS February in worrying sign for private road transport costs, rose to 0.2 recovery: Japan’s industrial output per cent compared with the same fell in February due to declines in the month last year. This was a leap • Biden administration threatens production of cars and electrical from the minus 0.2 per cent in tariffs on UK goods in ‘tech tax’ January. Overall inflation also picked row machinery, in a worrying sign for an up, to 0.7 per cent last month, from 0.2 • OECD hikes world economic economy struggling to recover from per cent in January. (23 March, The forecast on vaccines, US stimulus the deep impact of the coronavirus Straits Times) • Malaysia to achieve a transition to pandemic. The world’s third-largest high-income economy in 2024- economy is expected to contract in the Double-dip recession beckons for 2028 - World Bank current quarter due to a second star Covid-19 performer New • Malaysia increases palm oil coronavirus-related state of Zealand: New Zealand, a star exports to Saudi Arabia emergency that was imposed from performer in the battle against Covid- • PM: Sabah should take bold steps early January for Tokyo and some 19, is facing the prospect of a double- on development projects via PFI neighbouring prefectures. (31 March, dip recession as the impact of its • Sabah Maju Jaya development The Straits Times) closed border on the vital tourism plan outlines three main thrusts industry hits home. The economy contracted 1 per cent in the final three INTERNATIONAL UK exports to European Union months of 2020, recent data showed, drop 40% in January: UK goods ANTARABANGSA and some economists are tipping it exports to the European Union fell will shrink further in the current 40.7% in January, according to the Biden administration threatens quarter. The wobble follows a V- tariffs on UK goods in ‘tech tax’ Office for National Statistics (ONS), shaped recovery from a first-half row: The US has warned it could put while imports tumbled 28.8%. The slump as the nation successfully tariffs of up to 25% on a host of UK figures show the biggest drop since eliminated community transmission exports in retaliation for a UK tax on records began in 1997, and are the first of the virus. (18 March, The Straits tech firms. Ceramics, make-up, since new trading rules between the Times) overcoats, games consoles and UK and the EU came into force. The furniture could all be hit, according to Most Asia-Pac economies should hit a list published by the Biden ONS said temporary factors were administration. The duties are likely to be behind much of the falls. pre-pandemic levels in 2021: designed to raise $325m (£235.8m), Meanwhile, new data showed the UK Moody's Analytics: The Asia-Pacific the amount the US believes the UK economy shrank by 2.9% in January region continues to lead global will raise from US tech firms. (29 amid the third lockdown. (12 March, growth, with all economies tipped to March, BBC News) rebound this year, according to a BBC News) OECD hikes world economic Moody’s Analytics report. In addition, forecast on vaccines, US stimulus: China factory growth accelerates all Asia-Pacific economies - except The OECD sharply raised its 2021 the most in 3 months, bolsters the Philippines, Thailand and global growth forecast as the economic recovery: China's Malaysia - are expected to recover deployment of vaccines and a huge manufacturing activity expanded at past their pre-pandemic levels by end- US stimulus programme have greatly the fastest pace in three months in 2021. Already, the Asia-Pacific improved economic prospects. The March as factories cranked up region's gross domestic product Paris-based Organisation for (GDP) has edged above its pre- Economic Co-operation and production after a brief lull during the Development (OECD) says it now Chinese New Year holidays, with pandemic peak in the final quarter of expects the global economy to grow improving global demand adding 2020. (16 March, The Straits Times) by 5.6 per cent, an increase of 1.4 further momentum to a solid percentage points from its December economic recovery. The official Euro zone inflation continued to forecast. (10 March, The Straits manufacturing Purchasing Manager’s surge in March: Euro zone inflation Times) jumped in March, taking another step Index (PMI) rose to 51.9 in March Half-hearted approach to from 50.6 in February, recent data higher in what is likely to be a digitalisation risks Asean business from the National Bureau of Statistics temporary but sharp climb that may recovery: South-east Asia's (NBS) showed, remaining above the put consumer price growth above the prominence within global 50-point mark that separates growth European Central Bank’s near 2% manufacturing, trade and supply target later this year. Inflation in the chains has been fuelled by a large and from contraction for the 13th straight month. (31 March, The Straits Times) 19 countries sharing the euro low-cost workforce, shifts in accelerated to 1.3% in March from production and the region’s booming consumer base. However, these S’pore inflation turns positive for 0.9% a month earlier, up from a string favourable demographics will not be first time in a year on higher food, of negative readings late last year but enough to sustain growth, particularly services costs: Singapore’s core in line with analysts’ expectations, a as other Asian markets - including inflation turned positive in February flash estimate from Eurostat, the India and western provinces in China for the first time in a year as the costs European Union’s statistics office. (31 - emerge as strong competition. (1 of food and services rose, according to March, Reuters) March, The Straits Times) recently released data. Core inflation, 1 – 31 March 2021 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 Exports rise for sixth straight February inflation up 0.1%: NATIONAL month in Feb to RM87.57bil: Malaysia’s Consumer Price Index NASIONAL Malaysia's February exports rose (CPI) for February rose 0.1% from a 17.6% year-on-year (y-o-y) to year ago due to increases in goods and Malaysia to achieve a transition to RM87.57bil, backed by rising global services as well as food and non- high-income economy in 2024-2028 demand for semiconductors, rubber alcoholic beverages. Chief Statistician - World Bank: -- Malaysia is likely to products as well as petroleum Datuk Seri Dr Mohd Uzir Mahidin achieve a transition to a high-income products and palm oil. According to said that the CPI rose to 122.5 from economy between 2024 and 2028, a the International Trade and Industry 122.4. On a monthly basis, the CPI reflection of the country’s economic Ministry (Miti), this was a sixth increased 0.3% from January’s transformation development consecutive month of export growth trajectory over past decades, for the country and its highest decline. “The CPI without fuel according to the World Bank Group. recorded growth in 28 months. Miti increased 0.4% in February 2021 to However, it said further reforms are said imports during the month grew 113.6 as compared to 113.1 in the required to successfully join the ranks same month of the preceding year,” he of other leading and developed 12.7% y-o-y to RM69.7bil. This brought the trade surplus in February said. The CPI without fuel covers all economies. It said this in its latest goods and services except unleaded report, “Aiming High -- Navigating 41.6% higher versus the same month the Next Stage of Malaysia’s in 2020 at RM17.9mil while total petrol RON 95, unleaded petrol RON Development” which was launched trade rose 15.4% y-o-y to 97 and diesel. (25 March, The Star) online recently. (16 March, Bernama) RM157.27bil. (29 March, The Star) Malaysia to create 500,000 jobs this Malaysia increases palm oil exports Malaysia’s GDP to grow up to year: Tengku Zafrul: The to Saudi Arabia: Malaysia will 7.5pct in 2021: Bank Negara: government is set to generate 500,000 increase its palm oil exports to Saudi Malaysia’s economy is expected to job opportunities this year through the Arabia from 300,000 tonnes expand between six per cent and 7.5 National Employment Council to 500,000 tonnes worth per cent this year, Bank Negara (NEC), despite the highly challenging approximately RM1 billion. Malaysia governor Datuk Nor environment. Finance Minister Plantation Industries and Shamsiah Mohd Yunus said. This is Tengku Datuk Seri Zafrul Abdul Aziz Commodities Minister Datuk Dr against a 5.6 per cent gross domestic said the government had helped to Mohd Khairuddin Aman Razali said product (GDP) contraction in 2020. save 2.7 million jobs through the wage the volume was increased Nor Shamsiah said the GDP was subsidy program worth RM14.4 following Prime Minister Tan Sri likely to return to pre-Covid-19 levels billion. The government also managed Muhyiddin Yassin's visit to Saudi to reduce the unemployment rate from Arabia recently. “It is among the by mid-2021. She said this would be accomplishments following the prime supported by the improving external 5.3 per cent in May 2020 to 4.8 per minister's visit to Saudi Arabia other demand amid technology upcycle, cent in December 2020, said Tengku than the growth in demand for palm less stringent containment measures Zafrul.