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) • 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: 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, ) online recently. (16 March, ) 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 '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. “Moving forward, the main oil in that country throughout the and Covid-19 vaccine rollout, gradual focus throughout 2021 will be COVID-19 pandemic,” he told a press improvement in labour market prioritising direct and indirect conference in conjunction with conditions, as well as continued policy assistance to alleviate the burden the National Immunisation support for households and businesses faced by the people. The welfare of Programme registration campaign during the year. (31 March, Business the people needs to be better for the plantation sector. (12 March, Times) protected, especially those in the Bernama) informal economy. (11 March, Industrial production to pick up Business Times) Govt to introduce new national pace: Malaysia’s manufacturing investment policy – Azmin: The sector expanded for the second month Malaysia’s February 2021 PPI government will introduce a new in a row in January 2021, despite the increases 2.7 pct, the rst positive national investment policy to attract domestic movement control (MCO) shift since March 2020 – DOSM: more high-quality investors as the The Producer Price Index (PPI) local country moves towards a high-income and Moody’s Analytics expect it to pick up in coming months. “We production increased 2.7 per cent in nation, Senior Minister February 2021 compared with -0.1 per cum International Trade and Industry expect industrial production to pick up cent in January 2021, the rst positive Minister Datuk Seri Mohamed Azmin in the coming months from robust shift after experiencing negative Ali said. He said a working paper on external demand for electronics, and the proposed policy has been growth for 11 consecutive months from a rise in oil prices,” its economist since March 2020. “The Index of approved and endorsed by the Denise Cheok said. She said although Economic Action Council (EAC) and Agriculture, forestry & shing will be presented to the Cabinet within restrictions were not as strict as the continued to increase 35.0 per cent this month. “After long deliberations first round last March, strong export compared to 22.6 per cent in the and engagement with Bank Negara growth more than offset any decline in previous month. The Index of Malaysia, the Ministry of Finance domestic demand. “Malaysia has Manufacturing and Water supply (MoF) and the Malaysian Investment benefited from the global shortage of increased 1.5 per cent and 0.8 per Development Authority (MIDA), we semiconductors in the automobile cent, respectively,”. (31 March, thought it is timely for us to introduce sector, together with other Bernama) this new investment policy. (10 manufacturing powerhouses in the March, Bernama) region. (12 March, The Star)

1 –31 March 2021 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 2

Sabah set for border growth: Sabah Temporary VSAT internet LOCAL Economic Development and solution: The State Government TEMPATAN Investment Authority (Sedia) has been through the Science, Technology and directed to take the lead in developing Innovation Ministry will carry out PM: Sabah should take bold steps Sabah’s side of the Malaysia- installation for the Very Small on development projects via PFI: Indonesia regional border Aperture Terminal (VSAT) to The time has come for the Sabah state development. Chief Minister Datuk temporarily address the connectivity government to take bold steps to Seri Hajiji Noor, who gave the issues faced in rural areas. Its Minister forge more cooperation with foreign directive, said this involves a road Datuk Yakub Khan said Sabahans investors in implementing construction connecting the borders of have been plagued with internet development projects through private Serudong in Kalabakan, Tawau to connection issues which have financing initiative (PFI) widely, said Simanggaris, in Indonesia following negatively impacted students and Prime Minister Tan Sri Muhyiddin the Federal Government’s nod to pupils in the State particularly during Yassin. He said Sabah had great Sabah’s proposal to build a road into the Covid-19 pandemic. He said the potential in enabling its land and Kalimantan. The approval was government is aware of the matter and resources, and this could be evidenced conveyed to him by Economic Affairs will be carrying out large scale by the confidence of local and foreign Minister Datuk Seri Mustapa improvement known as the National investors to invest in the state. “The Mohamed during a video-conference Digital Network (Jendela) for the federal government will always give discussion early this month, said connectivity throughout the nation, support and attention to development plans like this,” he said when Hajiji, who is also State Finance particularly for Sabah which will take officiating at the launch of the Lok Minister, when chairing the Sedia place later this year and expected to be Kawi Resort City Development at the Board of Directors meeting at the completed by Dec 2022. (9 March, Sabah International Convention State Administration Centre (PPNS) ) Centre. (23 March, The Borneo Post) in Kota Kinabalu. (12 March, Daily Express) Freshwater lobster farming Sabah Maju Jaya development plan promising in Tuaran: Lobster outlines three main thrusts: Sabah Investors keen on sky train project farming through the Green Maju Jaya (SMJ) development plan in KK – Bung: The State Works Aquaponics Perennial System (Gaps) has outlined three main thrusts to Ministry has identified several will be a source of income for the B40 develop the state from 2021 to 2025, investors who are interested in the group in Kampung Bantayan, said Chief Minister Datuk Hajiji Noor. ministry’s sky train project, said its Tamparuli, when the project site He said the three thrusts were based minister Datuk Seri Bung Moktar becomes fully operational. Minister in on the SMJ slogan where S refers to Radin. He said that the ministry has the Prime Minister’s Department the three main economic sectors set out various goals to help develop (Special Duties) Datuk Seri Mohd covering agriculture, industry and and modernise the railway services in Redzuan Yusof said the field of tourism; the letter M refers to human Sabah and the sky train project is part freshwater aquaculture through the capital and the well-being of the of that plan. The Deputy Chief aquaponics system is one of the people; while the letter J refers to Minister said the sky train project will sectors with high potential to increase green infrastructure and sustainability connect the Kota Kinabalu the income of rural residents who are networks. (30 March, The Borneo International Airport (KKIA) to interested in becoming entrepreneurs. Post) Jesselton Centre in the city centre, and (24 March, Daily Express) then from Jesselton Centre to Alam Hajiji envisages Sogip as region’s Mesra. (11 March, The Borneo Post) RM10m allocation for petrochemical gas and petroleum road upgrade: The 2.2-kilometre of downstream hub: Sabah Chief Three Sabah districts to benefit unpaved road which serves as the Minister Datuk Hajiji Noor wants from Indonesian capital relocation: main route for residents in Kampung Sipitang Oil and Gas Industrial Park Minister: Indonesian President Joko Bunga Raya will be upgraded (SOGIP) to be developed into its full Widodo’s proposed move of capital immediately, said Deputy Chief potential as a premier petrochemical from Jakarta to Kalimantan is Minister Datuk Seri Bung Moktar gas and petroleum downstream expected to benefit Sabah after 2024 if Radin. He said the allocation to activity hub in Southeast Asia (SEA). road connectivity is linked with the upgrade the road was estimated at Nevertheless, he acknowledged that new city. This was reiterated by RM10 million. “The allocation infrastructure and land readiness were among the important issues that Deputy Minister (Economy) in the includes the cost of building three must be addressed by the Sabah Oil Prime Minister Department, Datuk bridges along the road as well as other and Gas Development Corporation Arthur , who hoped that related works. This project will be (SOGDC), as the promoter of SOGIP, the Sabah districts of , implemented as soon as possible to attract investors. Hence, in regard to Nabawan and Kalabakan located next because this road is important for the infrastructure in SOGIP, the chief or near the Kalimantan border would residents, especially students,” he told minister said the state government reap benefits from the Indonesian reporters after visiting several roads in will play its part by providing funds economy and market. Arthur need of upgrading in the Keningau under Sabah Maju Jaya Halatuju and reiterated the importance of Sabah’s district recently. (14 March, Daily through federal allocation under the human resource for Sabah’s Express) 12th Malaysia Plan. (8 March, Daily development. (18 March, Daily Express) Express)

1 –31 March 2021 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 3

SELECTED FACTS AND FIGURES FAKTA MUTAKHIR

Malaysia’s Monthly Manufacturing Statistics, January 2021

(12 March, Department of Statistics Malaysia)

Malaysia’s External Trade Statistics Bulletin, February 2021

(29 March, Department of Statistics Malaysia)

Malaysia’s Monthly Rubber Statistics, January 2021

(15 March, Department of Statistics Malaysia)

1 – 31 March 2021 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 4 Malaysia’s Producer Price Index, February 2021

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

(31 March, Department of Statistics Malaysia)

Malaysia’s Consumer Price Index, February 2021

Chart 1: Percentage Change of Consumer Price Index by Main Group:

(24 March, Department of Statistics Malaysia)

1 – 31 March 2021 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 5