MONTHLY NEWS SCAN

Tinjauan Berita Bulanan Compiled by IDS

Vol. 24 Issue 5 IDS Online http://www.ids.org.my 1 – 31 May 2019

HIGHLIGHTS Singapore’s export-reliant economy, about capital outflows from emerging FOCUS which posted solid growth in the first market economies and widespread quarter. Gross domestic product rose currency depreciation have eased. (27 • China’s economy weakened in an annualized 3.8% from the prior May, Reuters) quarter, higher than the government’s May, early data show German economy suffers another • Brexit shutdown slashes UK car earlier projection of 2%, as construction rebounded. Compared to blow as business confidence drops: production by 45% German business confidence fell to • Japanese giant companies pledge a year ago, GDP rose 1.2%, the slowest pace in almost a decade. The the weakest in more than four years their commitment to invest in as the escalation of global trade Malaysia Ministry of Trade and Industry sees “pockets of strength” in the economy tensions weighed heavily on the • South Korea seeks Malaysia’s this year from the services industry, outlook. Along with a survey expertise for its Muslim friendly though manufacturing will see a showing manufacturing still hospitality “sharp slowdown” following two contracting and new orders falling, • Master plan for Kadamaian in years of robust expansion. (21 May, it’s a reminder of the shaky situation pipeline Bloomberg) Europe’s largest economy is in. Its • Kudat-Palawan ferry service car industry is in upheaval and soon: Loke Oil mixed as China’s economy weakens, but OPEC cuts still industrial giants such as INTERNATIONAL support crude: Oil prices were Thyssenkrupp AG are mixed, pressured by a weakening seeing earnings plunge. (23 May, ANTARABANGSA Bloomberg) economy, especially in China, yet still supported by ongoing supply Russian first-quarter economic China’s economy weakened in May, cuts from producer club OPEC and growth below forecast, slowest early data show: China’s economic U.S. sanctions against Iran and since 2017: Economic growth in outlook deteriorated this month, after Venezuela. Front-month Brent crude April’s weaker-than-expected Russia in the first quarter missed futures, the international benchmark forecasts and slowed to its weakest performance combined with the for oil prices, were at $69.90 at 0106 renewed trade dispute to hit GMT. That was 21 cents, or 0.3%, level since late 2017, recent data confidence. That’s according to a below the last session’s close, when showed, raising chances of an Bloomberg Economics gauge Brent rose 2.1%. (28 May, Reuters) imminent rate cut by the central bank. aggregating the earliest available Gross domestic product (GDP) rose indicators of business conditions and Bank of France estimates second 0.5% in the first quarter in year-on- market sentiment. Copper prices quarter French GDP growth at 0.3 year terms compared with 2.7% in dropped as hopes faded for a quick percent: The French economy the fourth quarter of 2018, the resolution to the trade dispute, and should grow 0.3 percent in the second Russian statistic service said. This South Korean exports fell for a fifth quarter, the Bank of France forecast, brings Russia’s economy to the brink month. Sentiment among stock as the euro zone’s second-biggest of recession as the first quarter investors and small businesses also economy maintains a relatively growth print was the lowest since the declined. (29 May, Bloomberg) steady pace of growth despite the fourth quarter of 2017 when the

Brexit shutdown slashes UK car impact of anti-government protests. economy expanded by 0.3%, said production by 45%: Factory The Bank of France added in a Kirill Tremasov, a former economy shutdowns designed to cope with monthly business survey that ministry official and now head of disruption from a 29 March Brexit, sentiment in the French research at Loko-Invest. (17 May, slashed UK car production in April manufacturing industry had dipped to Reuters) 99 points in April from 100 points in by almost a half. Even though Brexit RBNZ needs 3% economic growth to is delayed, the factories still closed March, and also fell to 100 points in and production fell 44.5% according April from 101 in March in the meet targets, Bascand says: New to the Society of Motor services sector. (13 May, Reuters) Zealand’s economy needs to grow at Manufacturers and Traders (SMMT). around 3% a year for the central bank BOJ’s Kuroda sounds alarm on to meet its inflation and employment In what is called “an extraordinary global economy ahead of G20: month”, the SMMT said only 70,971 goals, Deputy Governor Geoff Bank of Japan Governor Haruhiko Bascand said. Speaking to a cars rolled off production lines. That Kuroda has said the global economic was 56,999 fewer than in April a year Wellington business audience after outlook is highly uncertain, and there the Reserve Bank cut interest rates, ago. Production for both home and are downside risks due to trade overseas markets fell by 43.7% and friction, China’s slowing economy Bascand said growth had fallen 44.7% respectively. (30 May, BBC and Britain’s negotiations to leave the below its potential rate of 2.8%, News) meaning more spare capacity in the European Union. “There is a high degree of uncertainty... and the economy and less price pressure. Singapore’s economy gains 3.8% as “We think capacity pressures will construction rebounds: The U.S.- downside risks are large,” Kuroda China trade war and weaker global said in a speech at a seminar. On a just become a little less,” he said. (10 demand are clouding the outlook for positive note, Kuroda said concerns May, Bloomberg) 1 – 31 May 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 Japan, South Korea, Singapore and areas in the digital economy in the NATIONAL Vietnam. The inclusion comes with Fourth Industrial Revolution (IR4.0) NASIONAL no immediate penalty. (29 May, for more sustainable growth. Prime Bernama) Minister Tun Dr Japanese giant companies pledge wants SMEs to increase their commitment to invest in Malaysia, Singapore sign competitiveness and actively Malaysia: Japanese giant companies supplemental agreement on participate in the global chain and have pledged their commitment to suspension of RTS Link Project: IR4.0. (2 May, ) Malaysia and Singapore officially expand their investments and Malaysia prepares to boost palm- signed the supplemental agreement businesses in Malaysia, said Prime biofuel use in wake of EU limits: (SA) for suspension of the Rapid Minister Tun Dr Mahathir Mohamad. Malaysia’s national automotive Transit System (RTS) Link Project In a special media conference with policy is expected to allow for a until September 30 this year. Malaysian journalists, Dr Mahathir higher percentage of palm-biodiesel Transport Minister said all of the 19 Japanese companies blends over the next few decades, said Malaysia would reimburse he met in a business dialogue had according to International Trade and Singapore about RM2 million by 31st expressed their support for the Industry Minister . The July 2019, as abortive costs incurred country and would campaign to get government plans to include a as a result of the six-month more Japanese companies to invest in “B20/B30-ready” specification for suspension. Loke and his Singapore Malaysia. “The Japanese vehicles in a review of the policy, counterpart Khaw Boon Wan sealed conglomerates were from various Leiking said in a statement. Malaysia, the agreement to formalise the sectors, ranging from health to the world’s second-largest palm oil suspension at the Transport Ministry financial services, and all of them producer, plans to double its biofuel have expressed their desire to expand here (Singapore). (21 May, Bernama) programme to B20 by 2020, which their business, or invest in new Malaysia´s export, import to grow mandates fuel be blended with 20 per projects in Malaysia,” he said after by 1.9 pct and 1.8 pct in April – cent palm-biodiesel. “Palm oil is a concluding his three-day working RAM: RAM Rating Services Bhd viable option to reduce our visit to Japan. (31 May, Bernama) (RAM Ratings) expects Malaysia’s dependency on fossil fuels, as it has export and import in April to grow at tremendous potential as a renewable South Korea seeks Malaysia’s 1.9 per cent and 1.8 per cent source of energy,” he said. (25 May, expertise for its Muslim friendly respectively, resulting in an overall Business Times) hospitality: South Korea is seeking trade surplus of RM13.4 billion for Malaysia to strengthen trade, Malaysia’s expertise, as well as the month. In a statement, RAM investment ties with Brazil: accreditation for its friendly hospital Ratings said this represented an Malaysia and Brazil will continue to services to further strengthen the improvement over the marginal focus on expanding bilateral trade sector which saw one million Muslim contraction of 0.5 per cent in export and investment ties. This is alongside visitors arrived in the country in and 0.1 per cent in imports recorded the possibility of having a free trade 2016, an increase of 33 per cent from in the preceding month. Looking agreement between Malaysia and a year before, says Korea Institute of ahead, it said the lacklustre trade Mercosur, an economic and political Halal Industry (KIHI). Its director- momentum was unlikely to recover in bloc comprising Argentina, Brazil, general Dr James Noh said currently the near term, largely due to the Paraguay and Uruguay. The Ministry the sector was operated by Korea escalating dispute between the United of International Trade and Industry Tourism Organisation, a government States (US) and China. “The tit-for- (MITI) in a statement said, this was agency which oversees the South tat tariff actions between the two discussed during a courtesy call on Korean tourism industry. “But I think countries in the past fortnight and the Brazilian President Jair Bolsonaro, by we need some kind of accreditation consequent bans on essential inputs its minister, Datuk Darell Leiking. He from Malaysia as it is recognised for their high-tech products marks a is currently leading a trade and worldwide (for its halal industry),” he turning point for the trade tensions, investment mission to three South told Bernama on the sidelines of the rapidly dimming hopes for a ‘quick American countries, including Brazil. four-day Seoul Food 2019 held in fix’ trade deal,” said head of Seoul. (22 May, Bernama) (25 May, Bernama) research, Kristina Fong. (31 May, Bernama) Malaysia’s economic growth to Malaysia's economy unaffected by ease in July-Sept 2019: Malaysia’s Govt allocating significant inclusion in US Treasury currency economic growth is anticipated to resources to support SMEs: The manipulator list: There are no ease in July to September 2019, says government is consequences to Malaysia’s economy the Department of Statistics holding to its 14th General Election’s from the country’s inclusion in the Malaysia. In the “Malaysian (GE14) pledges since its historic win United States (US) Treasury’s Economic Indicators: Leading, nearly a year ago by allocating monitoring list of potential currency Coincident and Lagging Indexes, significant resources to support the manipulators, Bank Negara Malaysia March 2019” Report released, Chief growth of small and medium (BNM) said here (). Statistician Datuk Seri Dr Mohd Uzir enterprises (SMEs) and encouraging “The Malaysian economy remains Mahidin said the annual change of their technological adoption. While resilient, underpinned by strong Leading Index (LI) showed an the SME gross domestic product economic fundamentals, including improvement to negative 1.7 per cent (GDP) growth is estimated to be the flexibility accorded by a floating from negative 2.8 per cent in sustained at 5.8% in 2018 and 2019, exchange rate and strong external February, 2019. The composite of LI the government has urged SMEs to balance,” it said. Malaysia is among is designed to monitor the economic embrace research and development, nine countries in the list, alongside direction in an average of four to six technology and explore new growth China, Germany, Italy, Ireland, months ahead. (24 May, Bernama) 1 – 31 May 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 2

but unforeseen problems, including households listed, we managed to unfavourable weather conditions, finalise the list to only 900 LOCAL caused delays. “This RM288 million households. “And we have TEMPATAN project is running smoothly and the distributed these 900 households to delays have not caused any increase be ‘adopted’ by various Federal and Master plan for Kadamaian in in the costs. One of the three bridges State government agencies.” (6 May, pipeline: The Institute of are complete while construction of Daily Express)

Development Studies (IDS) in the other two is in progress,” she told RM10.8mil allocation for Duchess collaboration with the liaison office reporters after a visit to the project of Kent Hospital: The Federal of Kadamaian Assemblyman, site. (25 May, Daily Express) Government has approved an Kadamaian Community Extra boost for Sabah oil palm: allocation of RM10.8 million for the Development Leaders Unit (UPPM) Sabah’s oil palm industry received a Duchess of Kent Hospital (HDOK) and the Kota Belud District Office shot in the arm with the recognition Sandakan to purchase new medical are in the midst of preparing a master of Lahad Datu Palm Oil Industrial equipment as well as for the plan for Kadamaian. State Rural Cluster (POIC) as a palm oil tender construction of a new building. Development Minister Datuk Ewon port. The status not only means an Finance Minister said Benedick said the master plan, which additional port and bulking facilities out of the total, the purchase of began in May, would take six months at Lahad Datu, but also directs medical equipment worth RM7.4 to complete and is expected to be benefits to palm oil sellers and million was to replace damaged launched in January, next year by buyers, as well as lifts the east coast equipment, while another RM3.4 Chief Minister Datuk Seri Mohd town’s profile in the global edible oil million was for the construction of a . “On March this year, I map. “It will facilitate the new building to house medical had requested IDS to help me development of the palm oil records and new ear, nose and throat conduct a study on producing a downstream industry…generates new (ENT) clinic. “RM6 million of the Master Plan for Kadamaian investment and employment allocation is from the Finance development as a guide and input for opportunities in the east coast,” said Ministry, while RM4.8 million is the people of Kadamaian to the Chief Minister Datuk Seri Shafie from the Health Ministry,”. (28 May, government and other strategic Apdal. (22 May, Daily Express) Daily Express) partners on the development of Kadamaian,” he said after receiving a RM500,000 grant for KB village to YB: Sukau projects in mid-year: courtesy call from the top boost tourism: The State Development projects for Sukau management of IDS headed by its Government has allocated a grant of constituency particularly under the Chief Executive Officer Datuk Johan RM500,000 to the Kampung Kiau Pekan Baharu Sukau programme will Ariffin Samad. (16 May, Daily Nuluh Tradition and Nature be implemented in the middle of this Express) Conservation Society (Gompito) here year. Sukau Assemblyman Datuk for developing tourism facilities. Saddi Abdul Rahman said the Kudat-Palawan ferry service soon: According to State Rural implementation of the projects was Loke: Minister of Transport Anthony Development Minister Datuk Ewon made based on the recent discussion Loke said it will be just a matter of Benedick who is also Kadamaian and approval by the State weeks or a month before the much- Assemblyman, the Sabah Government. He said that the awaited Kudat-Palawan roll-on-roll- Government segregated 1,200 acres projects were planned during the off (ro-ro) ferry service is of Sabah Parks and handed the previous government but that it will operational. At the same time, he portion over to residents of Kampung be continued for the sake of people in said, his office together with relevant Kiau in recognition of their Sukau. “Among the planned government agencies are identifying ownership of the customary land development are Sukau Second measures to ensure smooth within. “For sustainability of the area, Brigde and Pekan Baharu Sukau. implementation of barter trade and the villagers have agreed to set up a Both projects are very much awaited non-conventional transhipment trust and initiate the community by the people of Sukau. “We felt activities between Sabah, Indonesia forest conservation system (tagal) for grateful that the Chief Minister has and Mindanao. “These include development of an ecotourism agreed to approve these projects. I issuance of proper licences for non- centre,” he said while launching the believe these projects will be started conventional small ships (NCSS) local Pesta Kaamatan at Dewan after Hari Raya,”. (30 May, Daily urgently used by traders doing Express) Budaya Kiau Nuluh. (20 May, Daily business with Sabah,” he said during Express) Pledge to build sports complex in a meeting with officials of the BIMP- Measures to strengthen Tuaran’s Kuala Penyu: Youth and Sports EAGA Business Councils of Minister Syed Saddiq Abdul Rahman Sandakan, Tawau and Kudat, development: Several measures are being taken to strengthen the has pledged to build the long awaited including representatives from the sports complex in Kuala Penyu. private sector, here (Sandakan), district’s development, said Deputy Chief Minister Datuk Seri Wilfred Speaking to reporters when met at the recently. (13 May, Daily Express) Sabah Rakan Muda breaking of fast Madius Tangau. Tangau who is also Telipok-Kiulu road ready by Nov: Tuaran MP and State Trade and ceremony at Kampung Limbawang Rina: Construction of the 60km Industry Minister said among the Mosque, he said that the project Telipok-Kiulu-Randagong road is which was approved by the previous main focus is hardcore poverty government was shelved due to land 90.68 per cent done and is scheduled eradication. “To this end, the e-Kasih issue. According to him, Beaufort to be fully completed by November list for the district had been reviewed 2019. Rural and Regional MP Datuk Azizah Mohd Dun had and streamlined,” he said when raised the matter to him recently, and Development Minister Datuk Seri opening the Tuaran Kaamatan Rina Mohd Harun said the project, informed him that the land issue had Festival celebration, at Tun Hamdan been resolved. (27 May, New Sabah which began in 2016, was supposed Hall, Tamparuli. “Of the 2,000 to be completed in March this year Times) 1 – 31 May 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 3

SELECTED FACTS AND FIGURES FAKTA MUTAKHIR

MALAYSIA’S ECONOMIC PERFORMANCE, FIRST QUARTER 2019

(Source: 16 May, Department of Statistics Malaysia)

MALAYSIA’S INTERNATIONAL INVESTMENT POSITION, FIRST QUARTER 2019

(Source: 16 May, Department of Statistics Malaysia)

MALAYSIA’S MONTHLY RUBBER STATISTICS, MARCH 2019

(Source: 13 May, Department of Statistics Malaysia) 1 – 31 May 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 4

MALAYSIA’S CONSUMER PRICE INDEX, APRIL 2019

(Source: 24 May, Department of Statistics Malaysia)

MALAYSIA’S EXTERNAL TRADE STATISTICS, MARCH 2019

(Source: 3 May, Department of Statistics Malaysia)

1 – 31 May 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 5