MONTHLY NEWS SCAN

Tinjauan Berita Bulanan Compiled by IDS

Vol. 26 Issue 2 IDS Online http://www.ids.org.my 1 – 28 February 2021

HIGHLIGHTS Russia’s key economic indicators prepared for the meeting showed. FOCUS surprise on the upside in January: Finance ministers and central bank Russia’s main barometers of governors of the world’s top 20 • UK and EU in ‘constructive economic health, such as economies, called the G20, will hold a discussions’ over NI trade row employment, consumer demand and video-conference and the global • G7 says to counter ‘non-market’ wages, all exceeded expectations in response to the unprecedented havoc policies from China to ensure free January, opening the door for wreaked by the coronavirus on the trade economic recovery in 2021, recent economy will top the agenda. (23 • World Bank: Malaysian data showed. Russia’s commodity- February, Reuters) economy to recover this year dependent economy is on track to • China remains ’s largest grow this year after shrinking 3.1% in Japan cautious on global economy, foreign partner for 2020, its sharpest contraction in 11 urges support for poor nations: The manufacturing sector, says global economy warrants caution due MIDA years which, however, was smaller than expected. (19 February, Reuters) to uncertainty over coronavirus • on right track as main vaccinations and variants, though gateway for BIMP-EAGA trade China overtakes US as EU’s biggest Japan’s economy shows signs of • Pineapple Industry Board recovery with low infections, proposed for Sabah trading partner: China is now the Japanese Finance Minister Taro Aso EU’s biggest trading partner, INTERNATIONAL overtaking the US in 2020. China saidrecently. Speaking to reporters bucked a wider trend, as trade with after attending a virtual meeting of ANTARABANGSA Group of 20 financial leaders, Aso most of Europe’s major partners dipped due to the Covid-19 pandemic. also urged the major economies to UK and EU in ‘constructive unite in backing low income countries Trade between China and the EU was discussions’ over NI trade row: The given widening disparities of government and the EU have vowed worth $709bn (€586bn, £511bn) last economic growth and vaccinations. year, compared with $671bn worth of to “work intensively” to quell tensions (26 February, Reuters) imports and exports from the US. over post-Brexit checks at Northern Although China’s economy cratered China regains slot as India’s top Ireland ports. In a joint statement, both in the first quarter due to the trade partner despite tensions: sides said recent talks with Northern pandemic, its economic recovery later China has regained its position as Ireland leaders were “constructive”. in the year fueled demand for EU India's top trading partner despite a The talks were arranged after checks goods. (17 February, BBC News) decaying relationship between the at some ports were suspended Asian neighbours. The two countries were involved in a bloody border following “sinister” threats made to Singapore factory output extends rebound, rising 8.6% in January: conflict last year and saw India ban staff. UK and EU leaders say they Singapore's manufacturing output 220 Chinese tech apps. But that did condemn “unreservedly” any threats continued expanding last month, not stop China leapfrogging the US in or intimidation. (4 February, BBC driven mainly by electronics and 2020 to become India's biggest trade News) precision engineering. Factory output partner. Two-way trade between the rose 8.6 per cent year on year in long-standing economic and strategic G7 says to counter ‘non-market’ January for a third straight month of Asian rivals stood at $77.7bn (£55.2bn) last year. (23 February, policies from China to ensure free growth, according to data released BBC News) trade: Group of Seven leaders said recently by the Economic they would seek a collective approach Development Board (EDB). This Euro zone corporate lending to China to counter “non-market came in below the upwardly revised growth slows as monthly flows dry oriented” policies and practices and to 16.2 per cent growth rate in December up: Lending to euro zone companies ensure a fair multilateral global trade. last year, but topped the 3.6 per cent slowed last month as the flow of fresh “With the aim of supporting a fair and forecast of analysts in a Bloomberg credit came to a halt with the bloc poll. (26 February, The Straits Times) back in recession and banks tightening mutually beneficial global economic access to credit, European Central EU to call on G20 not to withdraw system for all people, we will engage Bank recent data showed. Lending to COVID-19 stimulus too early: The with others, especially G20 countries non-financial corporations in the 19- European Union will call on financial including large economies such as country euro area slowed to 7.0% in leaders of the world’s 20 biggest China,” the G7 said after a virtual January from 7.1% month earlier, a economies this week to keep pumping leaders’ meeting. (20 February, relatively high level not far from a 10- money into the global economy as year high of 7.4% hit in May. (25 Reuters) long as is needed for it to recover from February, Reuters) the COVID-19 pandemic, a document 1 – 28 February 2021 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 NATIONAL Malaysia, France agree on Recovery in manufacturing developing new forms of moderates in January: IHS NASIONAL cooperation: Malaysia and France, Markit: The recovery in the given their experiences in addressing Malaysian manufacturing sector World Bank: Malaysian the current COVID-19 pandemic, moderated in January due to rising economy to recover this year: have agreed that the two countries Covid-19 case numbers and stricter Malaysia’s economy is expected to should develop new forms of restrictions to try and curb the further return to positive growth this year, cooperation, including guaranteed along with other economies globally spread of the virus, according to IHS access to vaccines, and post-pandemic Markit’s survey. In its Malaysia on the sustained progress in the socio-economy recovery, said Foreign vaccine rollouts that will boost Manufacturing PMI statement issued Minister Datuk Seri Hishamuddin Tun consumption worldwide, the World recently, the headline MPI -- a Hussien. He said this was agreed upon Bank Group said. Its composite single-figure indicator of during an hour-long video call with Macroeconomics, Trade and manufacturing performance – slipped Investment Global Practice lead his counterpart from France, Jean- to 48.9 in January from 49.1 in economist, Richard Record, said the Yves Le Drian, who is Minister for December. It said businesses signalled Europe and Foreign Affairs of France, group expects the vaccine deployment the recovery in the manufacturing to take stock of and chart the future can be mostly completed in 2021 in sector was hindered at the start of course for long-standing Malaysia- most economies, leading to strong 2021 due to tighter curbs. (1 February, France cooperation. Both sides also recovery and demand, as well as The Star) boosting trade and commodity prices. exchanged views on regional and “We are projecting a global growth of international developments that are of Malaysia offers incentives to attract 4.0% this year. (23 February, The strong interest to the two countries. investors, more strategic ones to be Star) (24 February, Bernama) announced, says Muhyiddin: Prime Minister Tan Sri China remains Malaysia’s largest CPI down 0.2% in January: said foreign investors, including foreign partner for manufacturing Malaysia’s consumer price index Fortune 500 companies, have sector, says MIDA: China remains recorded a year-on-year (y-o-y) continued to show interest in investing Malaysia’s largest foreign investor for decrease of 0.2% to 122.1 in January, in Malaysia due to various incentives four consecutive years since 2016 and representing a 10th straight month of offered by the government. “We offer topped the rank of foreign direct declines since March last year. On a special incentives. This is our way to investment (FDI) for the month-on-month comparison, the CPI attract investors. So for me, it is manufacturing sector for the first nine was 1.2% higher over December. important that we increase months of 2020. The Malaysian Transport prices remained the leading investment. If you come to Malaysia, Investment Development Authority laggard, falling 5.1% y-o-y while you will get very attractive incentives. (MIDA) senior deputy director of other declining sectors included “So, this is what I think is our way to foreign investment promotion May housing, water, electricity, gas and Lim Ming Yee said from January to other fuels, clothing and footwear, and attract investors. So for me, it is September 2020, MIDA has approved restaurants and hotels, the National important that we increase 58 manufacturing projects with Statistics Department revealed. investment, but set our eyes on China's participation amounting to Excluding fuel, the consumer price (certain) sectors such as high RM16.77 billion. “Despite the adverse index increased 0.5% in January 2021 technology and digital,” he said. (28 effects of the Covid-19 pandemic seen February, Bernama) to 113.6. (25 February, The Star) on the global investment patterns, China continues to be our top FDI. (22 Malaysia trade surplus rises 38pct Digital economy’s contribution to February, Business Times) to RM16.6 bil in January 2021: GDP to hit at least 20 pct by year- Malaysia’s trade surplus soared by end – MDEC: The digital economy’s Inflation expected to return on 38.0 per cent year-on-year (y-o-y) to contribution to Gross Domestic high fuel prices, demand: After RM16.6 billion in January 2021, said Product (GDP) will easily reach 20 facing monthly deflation for nearly a the Department of Statistics Malaysia per cent by year-end from 19.1 per year, Malaysia is expected to feel (DOSM). Chief statistician Datuk Seri cent in the current COVID-19 inflationary price pressure once again Dr Mohd Uzir Mahidin said total trade pandemic environment, said Malaysia as fuel prices increase and demand widened by 4.1 per cent y-o-y Digital Economy Corporation gradually returns. Hong Leong to RM162.6 billion. He said (MDEC). Business digital adoption Investment Bank Research said Malaysia’s total exports continued its headline inflation is expected to turn director Muhundhan Kamarapullai positive momentum of five positive starting March 2021 onwards. said its contribution to the GDP has consecutive months of improvement Apart from the low base effect due to been quite significant even prior to the by expanding 6.6 per cent y-o-y to low crude oil prices in March last pandemic at over 18 per cent and now RM89.6 billion in January 2021, year, rising domestic fuel prices are it had moved up to 19.1 per cent. while imports continued to record an also anticipated to lift inflation “From a digital economy standpoint, increase of 1.3 per cent to RM73 growth. However, the research house we have gained quite a bit in terms o billion. “This was the highest export said the government’s decision to how the acceleration of work that has value recorded for January so far, lower the ceiling price for RON95 been done in the country. (25 driven by both domestic exports and petrol by three sen to RM2.05 per litre February, Bernama) re-exports. (26 February, Business may cap volatile inflationary Times) pressures. (26 February, The Star)

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Korean firm to build RM2.3 billion RM77m for KB flood mitigation: LOCAL copper foil factory: The State The Ministry of Environment and TEMPATAN Government’s latest collaboration Water (Kasa) has allocated RM77 with SK Nexilis, a South Korean million for flood mitigation projects in Sabah on right track as main copper foil manufacturer, will create the Kota Belud district, said Minister Datuk Seri Tuan Ibrahim Tuan Man. gateway for BIMP-EAGA 400 job opportunities. Deputy Chief trade: Sabah has great potential as Tuan Ibrahim said RM27 million was Minister Datuk Dr allocated for the Sungai Gurong- the main gateway for trade, focusing said Sabah is honoured to have been mostly on the larger Brunei, Gurong flood mitigation plan selected as the first overseas Indonesia, Malaysia, Philippines – expected to complete in 2022, while production base for the renowned RM50 million was allocated for the East ASEAN Growth Area (BIMP- on-going construction of flood EAGA) region. And, this is made company. “The value of this investment is amounting to RM2.3 mitigation projects in Sungai possible with the on-going expansion Kadamaian, Sungai Tempasuk, of the Sepanggar Bay Container Port, billion, and 400 jobs will be created as well. “From the bottom of my heart, I Sungai Abai, and Sungai Kawang- a project approved by the previous Kawang. Tuan Ibrahim said the flood wish to express my sincerest thanks government in 2016, costing RM1.03 mitigation projects would reduce the billion. Disclosing his satisfaction and appreciation to SK Nexilis for risk of flooding in the district which over the project, Minister in the Prime choosing Sabah as your investment had been hit by floods 86 times Minister’s Department (Sabah and destination,” said Joachim in his following the 2015 earthquake. He Sarawak Affairs) Datuk Seri Dr speech during the welcoming dinner said the earthquake had caused the Maximus Ongkili said the existing on- for SK Nexilis, held at the Sabah change in the terrains, especially the going port services and businesses International Convention Centre river basins, that resulted in the offered would also help bounce the (SICC). (28 February, The Borneo occurrence of frequent floods in Kota state’s economy. (16 February, The Belud. (28 February, Daily Express) Post) Borneo Post) RM19.6 juta untuk atasi masalah RM4.9 bln to solve Sabah flood, bekalan air bersih di DUN Sg. Pineapple Industry Board proposed drainage, sewerage woes: The for Sabah: The Federal and State Manila: Dua projek bekalan air luar Federal Government has allocated bandar yang sedang dilaksanakan di Governments are committed to RM4.9 billion in efforts to solve continue working together to ensure kawasan Dewan Undangan Negeri problems related to floods, drainage development of the agricultural sector (DUN) Sungai Manila yang menelan and food security in the country. This and sewerage in Sabah. According to belanja RM19.6 juta dijangka siap tahun ini. Ahli Dewan Undangan was stated during a courtesy call by Minister of Environment and Water Datuk Seri Tuan Ibrahim Tuan Man Negeri (ADUN) Sungai Manila Federal Agriculture and Food Industry Mokran Ingkat berkata dua projek itu Minister Datuj Seri Dr Ronald during his visit to a flood mitigation project, there are about 40 major iaitu di Kampung Luboh bernilai Kiandee on Chief Minister Datuk Seri RM8.2 juta dan Kampung Dandulit projects in the state that will be Hajiji Mohd Noor at the Sabah State RM11.4 juta yang mana kini sedang Administrative Centre (PPNS). This implemented to address these issues. dalam pembinaan. “Apabila dua was Dr Ronald’s first visit to Hajiji at The projects involve the Ministry of projek ini siap sepenuhnya dijangka PPNS which was also attended by the Environment and Water, Water hujung tahun ini, akan memberi Director General of Paddy and Rice Supply Department (JBA), Sewerage manfaat kepada penduduk kampung Regulation and Secretary of the Paddy Services Department (JPP) and the menikmati bekalan air bersih,” and Rice Industry Division Azman Irrigation and Drainage Department. katanya ketika ditemui selepas Mahmood, Deputy Director General (27 February, The Borneo Post) Taklimat Jabatan Air Sabah di Pejabat of the Malaysian Pineapple Industry Jabatan Air Sandakan. (10 Februari, Board (LPNM) Mohd Khairuzamri Special allocation of RM3.1 mln for Utusan Borneo) Sabah assemblymen: M. Salleh, Director of Farmers Sabah state govt approves Sabah Chief Minister, Datuk Seri Development National Farmers upgrading works of Kota Kinabalu- Organisation (Nafas) Abu Sujak announced a special Kudat bypass: Chief Minister Datuk Sanusi and Director of Integrated allocation of RM3.1 million for the 31 Seri Hajiji Noor announced that the Agricultural Development Area opposition assemblymen in the state. GRS State Government has approved (IADA) Kota Belud Salmah Labulla. He said each of these assemblymen the upgrading of the flood-prone Kota (21 February, Daily Express) would receive RM100,000 to help Kinabalu-Kudat bypass (Lebak RM11m bridge to link Ranau them tackle problems in their Moyoh-Kampung Sembirai) with an villages: The wishes of about 900 respective constituencies due to the estimated cost of RM6.5 million. residents of Kampung Togop Lau, Covid-19 pandemic. “Out of a sense Visiting the area recently, he said Ranau, who want a permanent bridge of responsibility, I am giving this decisive steps must be taken since the connecting their village to Kampung special allocation as proof of the road was crucial in linking Kota Togop Darat will be realised soon (GRS) state Marudu, Kudat and Pitas to the Kota after the State Government approved government’s concern for the Kinabalu City. During the visit, Hajiji the construction of a concrete bridge constituents’ wellbeing. was briefed by Public Works worth RM11 million. Deputy Chief This allocation is for the opposition Department (PWD) Director Ir Ali Minister Datuk Dr Joachim Gunsalam assemblymen to help reduce the Ahmad that in the past two years since said works to construct the bridge burden of the people in their 2019, it had been inundated 28 times across Kopuakan River will respective areas amid the pandemic.” causing inconvenience to thousands of commence soon. (8 February, Daily (9 February, The Borneo Post) motorists. (22 February, The Borneo Post) Express)

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SELECTED FACTS AND FIGURES FAKTA MUTAKHIR

Malaysia’s GDP Value and GDP Per Capita Versus Its ASEAN Peers, 2019

(Source: 15 February, The Star)

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

(Source: 24 February, Department of Statistics Malaysia)

Malaysia’s International Investment Position, Fourth Quarter 2020

(Source: 11 February, Department of Statistics Malaysia)

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Malaysia’s Monthly Rubber Statistics, December 2020

(Source: 10 February, Department of Statistics Malaysia)

Malaysia’s Consumer Price Index, January 2021

(Source: 24 February, Department of Statistics Malaysia)

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