Monthly News Scan
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MONTHLY NEWS SCAN Tinjauan Berita Bulanan Compiled by IDS Vol. 25 Issue 8 IDS Online http://www.ids.org.my 1 – 31 August 2020 HIGHLIGHTS unlike financial markets, economic Japan factory output up but retail FOCUS forecasters have yet to show any new sales down amid fragile Covid-19 wave of optimism about quelling the recovery: Japan’s factory output rose virus and business returning to • IMF says coronavirus may shrink in July at the fastest pace on record, global imbalances further in 2020 normal. Indeed, the latest Reuters poll driven by automobiles and car • China’s factory deflation eases in suggests that if the world’s largest parts, signaling a gradual recovery economy is to sustain its momentum, July from the blow delivered by the • Malaysia’s 17.1 pct GDP a second round of fiscal stimulus contraction in Q2, the worst so ahead of the upcoming presidential coronavirus pandemic. But retail sales far in ASEAN election to preserve jobs would be fell for a fifth straight month and at a • Shocks in oil and gas industry required. (21 August, Reuters) somewhat faster pace, a worrying sign weigh on financial performance for private consumption, which • RM15 mln spent on education aid Singapore factory output shrinks accounts for more than half of the program – CM 8.4% on further biomed declines: world’s third-largest economy. The • 180 juta untuk industry halal Factory output has racked up its third Sipitang data on Monday (Aug 31) straight month of contraction on the underscored the fragility of an back of further declines in the volatile INTERNATIONAL biomedical sector. Overall production economy that suffered a record 27.8 ANTARABANGSA fell 8.4 per cent in July from the same per cent contraction in the April-June month last year - a steeper drop than quarter as the pandemic took a heavy IMF says coronavirus may shrink the revised 6.5 per cent fall in June. toll on both domestic and external global imbalances further in 2020: Exclude biomedical manufacturing demand. (31 August, The Straits The International Monetary Fund said and the decline would be 5.2 per cent, Times) recently that global current account according to Economic Development imbalances narrowed in 2019 as trade Board (EDB) datapublished recently. German economy contracts by slowed, and the coronavirus could (27 August, The Straits Times) record 9.7% in Q2: The German narrow them further in 2020, but some economy contracted by a record 9.7 commodity exporters and tourism- US and China hold ‘constructive’ per cent in the second quarter from the dependent countries will swing to trade talks after delay: The US and current account deficits. The IMF’s China have held talks over their so- previous three months as consumer called “phase-one” trade deal after the spending, company investments and External Sector Report on currencies discussion was delayed earlier this and imbalances for the world’s 30 exports all collapsed at the height of month. Both sides saw progress and the Covid-19 pandemic, the statistics largest economies showed that net are committed to the agreement, the current account balances fell by 0.2 US Trade Representative said. office said recently. The economic percentage point to 2.9% of global Negotiations had been expected to slump was much stronger than during GDP. (5 August, Reuters) take place on 15 August but were the financial crisis more than a decade postponed by President Donald ago, and it represented the sharpest China’s factory deflation eases in Trump. In an election campaign decline since Germany began to July: China's factory deflation eased speech earlier this month, Mr Trump record quarterly gross domestic last month, driven by a rise in global said: “I don’t want to talk to China product calculations in 1970, the right now.” (25 August, BBC News) oil prices and as industrial activity office said. (26 August, The Straits climbed back towards pre-coronavirus Times) levels, adding to signs of recovery in UK worst hit among major the world's second-largest economy. economies: The UK was the hardest The producer price index fell 2.4 per hit by Covid-19 among major French business activity weaker cent from a year earlier, the National economies from April to June, the than expected in August: PMI: Bureau of Statistics said, compared Organisation for Economic Co- French business activity has lost more with a 2.5 per cent decline tipped in a operation and Development has said. momentum than expected in August, a Its economy suffered its biggest slump survey showed, as firms worked off Reuters poll of analysts and a 3 per on record over the three-month period cent drop in June. (11 August, The as coronavirus lockdown measures backlogs of work built-up during a Straits Times) pushed the country officially into coronavirus lockdown. Data compiler recession. Its 20.4% contraction was IHS Markit said its preliminary U.S. economic recovery outlook well above the 9.8% drop for the 37 purchasing managers index (PMI) fell steady even as Wall St touches OECD nations as a whole, the think to 51.7 points from 57.3 in July - far record: Reuters Poll: The U.S. tank said. Spain was the next worst below the average forecast for 57.2 in economy is recovering smartly from hit, with a decline of 18.5%. (26 a Reuters poll of economists. (21 the deepest recession on record, but August, BBC News) August, Reuters) 1 – 31 August 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 to US$8.83 billion,” it said. (28 overall weight, ” he said. (19 August, NATIONAL August, Bernama) The Star) NASIONAL Exports rise 3.1 pct, trade surplus Economic indicators show signs of Malaysia’s 17.1 pct GDP soars 57.5 pct in July 2020 – MITI: recovery, growth projected to contraction in Q2, the worst so far Malaysia’s exports in July 2020 improve – Mustapa: Malaysia's in ASEAN: The massive 17.1 per cent increased 3.1 per cent to RM92.53 economic growth is expected to gross domestic product (GDP) billion from that of July 2019, the improve in the second quarter of this contraction in the second quarter (Q2) highest export value ever recorded for year and recover next year, said 2020 has so far made Malaysia the the month of July, said the Minister in the Prime Minister's worst-performing economy in International Trade and Industry ASEAN. For Malaysia, the figure is Department (Economy) Datuk Seri Ministry (MITI). This was also the Mustapa Mohamed. He said even the worst double-digit quarterly second highest export value ever contraction since 1998, or about 22 though analysts generally opined that registered after RM97.12 billion the economic performance in the years, following the unprecedented posted in October 2018, it said, adding lockdown imposed to stem the spread second quarter would experience a that imports in July 2020 declined 8.7 contraction due to the COVID-19 of COVID-19. This has forced Bank per cent year-on-year (y-o-y) to Negara Malaysia (BNM) to revise impact, however the economic RM67.38 billion. “Trade surplus down the country's 2020 indicators issued by the Statistics expanded 57.5 per cent to RM25.15 GDP forecast to -3.5 to -5.5 per cent Department had shown signs of from -2 to 0.5 per cent previously, as billion from RM15.97 billion in July 2019, and was the highest monthly recovery in stages. In fact, this was the initial assumption was based on a supported by a better labour market in lockdown period of only four weeks trade surplus ever recorded,” it said in a recent statement . (28 August, June 2020 which registered an instead of seven weeks. BNM unemployment rate of 4.9 per cent, governor Datuk Nor Shamsiah Mohd Bernama) down 0.4 percentage points compared Yunus said the economy June 2020 trade up 2.2 pct as was expected to recover and post a with 5.3 per cent in May 2020. (10 movement restrictions gradually lift August, Bernama) growth of 5.5 per cent to 8.0 per cent – MITI: The gradual lifting of in 2021. (14 August, Bernama) movement restrictions due to COVID- Natural rubber exports up 14.2 pct Shocks in oil and gas industry weigh 19 in Malaysia has resulted in an in June 2020, says DOSM: Exports on financial performance: The oil improvement in total trade in June of Malaysia'a natural rubber increased and gas industry is experiencing 2020 to RM144.84 billion, up 2.2 per 14.2 per cent in June 2020 to 38,587 its third price collapse in 12 years but cent from June 2019. Deputy tonnes from 33,780 tonnes in May after the first two shocks, the industry International Trade and Industry 2020, according to the Department of rebounded and business continued as Minister Datuk Lim Ban Hong Statistics Malaysia (DOSM). The usual. This time it is different as the said his ministry has been actively main export destination was China current context combines a supply promoting the use of digital platforms, accounting for a 68.1 per cent shock with an unprecedented drop in exhibitions and business matching share, followed by Finland (4.2 per demand for the commodity and a that are increasingly relevant under cent), Germany (3.8 per cent), the global humanitarian crisis brought the new normal. “The Malaysian US (2.9 per cent) and Taiwan (2.7 per about by the COVID-19 government has relaxed the cent). “Rubber gloves are still the pandemic. Additionally, the sector’s regulations on entry of expatriates into financial and structural health is worse our country.