MONTHLY NEWS SCAN

Tinjauan Berita Bulanan Compiled by IDS

Vol. 25 Issue 6 IDS Online http://www.ids.org.my 1 – 30 June 2020

HIGHLIGHTS be greater in places where economic number still signaling contraction, FOCUS activity is picking up faster. (12 June, new orders declining and employment Reuters) falling. (23 June, The Straits Times) • China’s economy will resume growth this quarter, economists Japan’s deflation gathers New Zealand enters first recession say momentum as prices extend since 2010 as coronavirus bites: • A month into reopening, no clear declines: Japan’s core consumer New Zealand entered recession for the turn for U.S. economy or pandemic prices fell for a second straight month first time in almost a decade as the • calls for cohesive in May, reinforcing deflation coronavirus pandemic led to the economic measures among expectations and raising the challenge nation's biggest quarterly contraction ASEAN members for policymakers battling to revive an in 29 years. Gross domestic product • Stimulating the economy is as economy reeling from the coronavirus fell 1.6 per cent in the first quarter challenging as containing pandemic. The data will likely from the fourth, Statistics New COVID-19 - Muhyiddin • RM240m ‘ New Deal’ complicate the Bank of Japan's job of Zealand said on Thursday (June 18) in • 50 broadband towers for Sabah restoring growth and inflation, with a Wellington. That's the largest decline schools raft of recent indicators suggesting the since 1991 and more than the 1 per nation is in the grip of its worst cent expected by economists. From a INTERNATIONAL postwar economic slump. (19 June, year earlier, the economy shrank 0.2 ANTARABANGSA The Straits Times) per cent - the first annual contraction since 2009. (18 June, The Straits China’s economy will resume Brexit: New momentum needed in Times) growth this quarter, economists trade talks, say UK and EU: UK and say: Economists upgraded their EU leaders have said new momentum Australian employment recovering forecasts for China's economic growth is needed in negotiations on their gradually from coronavirus shock: this quarter and for 2020, signaling future relationship, after high-level Australian employment is continuing more optimism that the country is on talks recently. The PM, who met EU to pick up gradually after the huge track for a gradual recovery. Gross Commission President Ursula von der losses caused by coronavirus domestic product will expand at 1.5 Leyen virtually, said there was a “very lockdowns, recovering around 30 per per cent in the second quarter from a good” chance of getting a trade deal cent of the jobs initially shed, data year earlier, according to the median by December. He said he saw no showed recently. The Australian estimate of economists in a reason why it cannot be “done in Bureau of statistics said total payroll Bloomberg survey recently. That’s July”, after the sides agreed to jobs increased 1 per cent between faster than 1.2 per cent growth seen in intensify talks next month. Mrs. von mid-May and mid-June, though they the last survey in May. Economists der Leyen said they “agreed to deliver were still down 6.4 per cent on their also dialled up their full-year growth the best deal” for citizens. The EU level in mid-March before the projection to 1.8 per cent from 1.7 per also noted the UK’s decision not to lockdowns started to take effect. (30 cent. (23 June, The Straits Times) extend the transition period, which June, The Straits Times) ends in December. (15 June, BBC A month into reopening, no clear News) Russia cuts rates to record low amid turn for U.S. economy or pandemic: coronavirus crisis: Russia’s central A month into efforts to broadly reopen Euro zone economy moves towards bank slashed interest rates recently to the U.S. economy there is little clarity slow recovery from record slump: the lowest level since the collapse of either on the pace and durability of the The euro-area economy picked up the Soviet Union, pledging to consider recovery, or on the ability to from its record slump, but the good the need for even lower rates amid convincingly suppress the virus that news on activity was tempered with a waning inflationary risks and a has killed more than 112,000 warning that the recovery will be shrinking economy. The central bank Americans. Data on cellphone traffic, protracted. The June Purchasing delivered a deeper-than-usual cut of employee time management and Managers Index from IHS Markit 100 basis points, taking the key rate to weekly unemployment claims point to showed an improvement at the 4.5% RUCBIR=ECI, in the face of the an ongoing and steady climb back - region's manufacturers and service crisis sparked by the coronavirus and but one that shows stark divisions firms, and confidence at the highest the related lockdowns, in line with a among states, and some evidence the since February. It also had plenty of Reuters poll. (19 June, Reuters) spread of the novel coronavirus may reason for caution, with the headline 1 – 30 June 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 pandemic could start to bottom out. negatively affect demand. (25 June, NATIONAL (30 June, Bernama) Business Times) NASIONAL Malaysia’s economy to grow 7.5pct Malaysia’s aerospace Malaysia calls for cohesive in 2021: S&P: S&P Global Ratings manufacturers see business drop economic measures among ASEAN has reaffirmed Malaysia’s A- rating 30pct in Covid-19 era: The local members: Malaysia has called for with a revision to the outlook to aerospace manufacturing sector has cohesive economic measures among negative from stable. The experienced a 30 per cent reduction in ASEAN member states to build reaffirmation comes with S&P’s deliveries requirements for long-term socioeconomic resilience in bullish forecast of a 7.5 per cent contracts, resulted from the delay of mitigating the impact of COVID-19, growth in the country’s gross aircraft deliveries in particularly said the International Trade and domestic product next year. The 7.5 among the airlines and lessors. Market Industry Ministry (MITI). In a per cent is more optimistic than the observers said the Movement Control statement on the 36th ASEAN World Bank’s expected 6.9 per cent Order (MCO), which was enforced Summit, the ministry said Prime expansion of Malaysia’s economy from March 18 till May 3, had Minister Tan Sri next year. Finance Minister Tengku partially halted manufacturing stressed that leaders, in moving Datuk Seri Zafrul Abdul Aziz, when activities in Malaysia. However, the beyond efforts to contain commenting on S&P's latest move, maintenance, repair and overhaul the pandemic in the region, must said the negative outlook was driven (MRO) services for both commercial inculcate a similar sense of urgency to by the impact of the Covid-19 and private jet continued to operate to also push for economic recovery. In pandemic on Malaysia’s economic support grounded aircraft, despite a his intervention, he said the public growth and fiscal position. (26 June, similar 30 per cent contraction in the health crisis had a profound impact Business Times) overall operations. (22 June, Business on economies and rebooting the Times) regional economy must be the Federal government to be fair to all grouping’s utmost priority to mitigate states in economic recovery efforts – Malaysia to improve trade relations disruptions to trade and strengthen the Azmin: The Federal Government has with India pertaining to palm oil: resilience of the regional supply given assurance that it will be fair to Malaysia is working on creating better chains. (27 June, Bernama) all states, including those led by the trade relations with India, its top palm opposition, in the efforts to revive the oil buyer last year, and addressing Stimulating the economy is as COVID-19-affected economy. Senior some of the issues that have negated challenging as containing COVID- Minister Datuk Seri Mohamed Azmin the country’s palm oil share in the 19 - Muhyiddin: Prime Minister Tan Ali, who is also the International global market, Malaysian Palm Oil Sri Muhyiddin Yassin described the Trade and Industry Minister, said no Council (MPOC) chief executive task of stimulating the country’s issue arose regarding differing officer Datuk Dr Kalyana economy following the months- political ideologies when it came to Sundram said. He noted that 2020 long Movement Control Order economic development, which was a had been a tough year so (MCO) period as being as challenging shared responsibility especially post- far, with India falling to the lowest as curbing the spread of COVID-19. COVID-19. “We put aside politics. (13th) position among the country’s The Gambir assemblyman said This is the time when the Federal and top palm oil export destinations in the although economic activity had state governments must work together first five months. For the January-May resumed, it had not reached the level to overcome the challenges faced due 2020 period, Malaysia's shipments of targeted by the government and there to the Movement Control Order palm oil to India plunged by 93 per were many problems faced, including (MCO) and COVID-19. (30 June, cent to 151,106 tonnes from 2.16 by businesses. According Bernama) million tonnes recorded in the same to Muhyiddin, economic experts period last year. (22 June, Bernama) have also forecast that the country’s Further deflation in 2020 as April economy would contract in the second CPI matches steepest drop in 10 Malaysia’s unemployment rate and third quarters of this year. (27 years: Malaysia can expect further expected at 4.0pct this year: June, Bernama) deflation this year after its Consumer Malaysia’s unemployment rate is Price Index (CPI) declined 2.9 per expected to remain high for the Export performance May improve cent year-on-year (y-o-y) in May, remaining months this year as some as Malaysia returns to trade surplus economists said. This was the third companies are likely to retrench – Ambank: Malaysia’s export month in a row that the CPI had been employees. MIDF Research said most performance could improve moving in decline, after a 2.9 per cent drop in retrenchment was to reduce operating forward, with support coming from April and another 0.2 per cent fall in costs in line with the new standard the modest recovery in March. May’s 2.9 per cent fall operating procedures in place and on semiconductors at the same time, matched April's decline as the expectations of lower revenue as says AmBank Research. In a recent sharpest y-o-y drop in 10 years. consumer activities would take longer note, it said this optimistic view partly Economists cautioned that while to fully resume. “Sentiment is still follows the government's decision to deflation tends to have a positive quite weak as people fear of another allow more industries to resume effect on consumers in terms of wave of Covid-19, hence take a more operations with some at full operating decline in the prices of goods and gradual return to their normal capacity since May 4, 2020. This, it services, the Covid-19 pandemic had activities. “Therefore, we foresee noted, is reflected in the improvement significantly altered the dynamic. Due unemployment rate to edge up higher in May’s Manufacturing Purchasing to the pandemic-induced economic than 3.8 per cent previously estimated Managers’ Index (PMI) which acts as shutdown, there are increased fears to 4.0 per cent,” said MIDF Research an early indication that the economic around job prospects, employment in a recent report. (16 June, Business downturn caused by the Covid-19 status and wage reduction, which will Times)

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This was part of the RM70 million beliau, usaha baik itu dapat memberi LOCAL funding channeled through the manfaat dan faedah kepada 716 Federal Agriculture and Food nelayan di negeri ini. (15 Jun, New TEMPATAN Industries Ministry to the Farmers Sabah Times)

RM240m ‘Sabah New Deal’: The Organisation Authority (LPP) for State govt to ensure wood industry State Government recently unveiled distribution to all State LPPs. LPP sustainable: Tangau: The State the Sabah Covid-19 Stimulus Package Deputy Director-General Norlizah Government will ensure the state’s Phase 2, involving RM240 million Mohamad said of the total allocation wood industry is sustainable, said with primary objective of speeding up given to Sabah, RM330,000 was State Trade and Industry Minister the state’s digital economic provided under the Economic Datuk Seri Wilfred Madius Tangau. transformation as well as boost the Stimulus Package One’s farm According to him, this includes agro-food sector and human capital mechanisation programme for ensuring sufficient raw materials are re-development. Chief Minister upgrading agriculture machinery, available to produce timber-based Datuk Seri Mohd said especially for paddy cultivation. (27 June, Daily Express) downstream products. “In this regard, apart from boosting the state’s we will hold discussions with the economic recovery, the second RM189m given to 918,829 families: industry and related associations such package themed “Sabah New Deal” is A total of RM189.2 million has been as the Sabah Timber Industry also meant to enable Sabah moves into disbursed to 918,829 families by the Association (STIA),” he said. “We are the “new normal”. He said the Covid- State Government under the Sabah also in the process of drafting a legal 19 pandemic has resulted in the need We Care Covid-19 Aid programme, as framework for the state cabinet to to do many things via online through of June 22, during the Movement establish a legal system for timber the use of digital technology, Control Order (MCO) period. grown by villagers which can be used application and tools. (19 June, Daily Political Secretary to the Chief as raw materials without interference Express) Minister, Nic Chak, said the by anyone.” (24 June, Daily Express) assistance involved Sabahans in 50 broadband towers for Sabah various sectors. “The RM189 million Kudat gains from Banggi, schools: Some 50 broadband towers covers Sabahans from all walks of Balambangan economy: Kudat is have been approved to benefit Sabah lives as well as Covid-19 test reagents, Sabah’s northernmost town, a former schools while another 115 are still face masks hand sanitisers for the capital, has long lagged behind its under consideration, said Education public, among others,” he said in a southern neighbour Kota Belud and Innovation Minister Datuk Dr recent statement. “Of the number, the town’s economic vibrancy, and Yusof Yacob. “The towers cater to Welfare Services Department has markedly so during the Movement 3G, and 4G systems,” he said after the channelled RM18.99 million to Control Order (MCO) period. Many presentation of face masks and hand 63,226 recipients comprising orphans, would even venture to say that Kota sanitisers in SMK Entabuan. These senior citizens, people with Marudu’s business vibrancy had towers, he said, will involve a cost of disabilities, Covid-19 patients and edged out Kudat when in the past, RM400 million to construct. “School others. (26 June, Daily Express) people in Kota Marudu used to travel students must be exposed to the to Kudat for various provisions. internet as proficiency in it is Grants worth RM2.5 mln handed Kudat’s retail economy is now important,” he said. While the towers over to youth associations in gaining from islands north of its are important, he noted that there are Sabah: The Sabah Youth and Sports location, being positioned as limitations, in terms of internet or Ministry recently handed over RM2.5 Malaysia’s tourism undiscovered broadband coverage in rural areas. (27 million in grants to be distributed to jewels like fabulous caves to be June, Daily Express) 14 associations registered with the explored with Balambangan’s 19KM Sabah Youth Council (MBS). Its Kok Simpul white sandy beach is one Free solar energy for 300 villages: minister, Phoong Jin Zhe said the of the longest white beaches in Sabah Some 300 villages in the Tawau grant was to fund various programmes and Malaysia. (20 June, Daily Parliamentary Constituency that are to help youths in the state. “This grant Express) without electricity supply stand to is 50 per cent of the total amount that benefit from free solar energy when should be distributed to the RM20m for reskilling workers: For 300 units of the solar power system associations this year. But due to a empowering human capital and are installed, said Member of number of factors including their generating new job opportunities, Parliament for Tawau, Datuk performance last year, the grant will Mohd Shafie said the State . She said solar be given in two phases. (5 June, New Government will allocate RM20 equipment such as solar panels and Sabah Times) million to the Education and batteries from China will be donated Innovation Ministry to empower and through the Lions Club as a LKIM peruntuk RM9.04 juta re-skilling workers who have lost their community service project. “The untuk Projek Khas Perumahan jobs as well as those who are jobless Tawau Parliamentary People’s Nelayan di Sabah: Lembaga and currently looking for a job. He Service Centre is identifying the Kemajuan Ikan Malaysia (LKIM) memperuntukkan sebanyak RM9. 04 said the new normal stressed on social villages in Apas and Balung that need distancing and reduced physical solar power, pending the shipment of juta untuk Projek Khas Perumahan Nelayan (PKPN) bagi membantu contact and thus it not only changed solar equipment from China. “Today, but also created demands for working I am here again to hear out the golongan nelayan di seluruh Sabah. Menteri Pertanian dan Industri with new skills. In this context, he people’s needs and problems,”. (11 said, companies also need to deliver June, New Sabah Times) Makanan, Datuk Seri Dr berkata, peruntukan itu services and products in a way that RM6 million for easing burden of adalah untuk membaikpulih, fulfilled the demands of the new Sabah farmers: Sabah has been membina rumah baharu dan normal, like for example, building allocated RM6,071,500 by the Federal mewujudkan penempatan semula plan need to be changed to have Government under the economic nelayan yang lengkap dengan automatic doors, good air ventilation, stimulus packages to ease the prasarana asas supaya masyarakat large spaces, and equipped with financial burden of the State’s farmers nelayan dapat menikmati kualiti hidup touchless facilities and equipment. (19 affected by the Covid-19 pandemic. yang lebih baik dan selesa. Jelas June, Daily Express) 1 – 30 June 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 3

SELECTED FACTS AND FIGURES FAKTA MUTAKHIR

Malaysia’s Industrial Production Index, April 2020

(Source: 11 June, Department of Statistics Malaysia)

Malaysia’s Producer Price Index, May 2020

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

(Source: 30 June, Department of Statistics Malaysia)

Foreign Direct Investment in Malaysia, 2019

(Source: 11 June, Department of Statistics Malaysia)

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Malaysia’s Monthly Rubber Statistics, April 2020

(Source: 15 June, Department of Statistics Malaysia)

Malaysia’s External Trade Statistics, May 2020

(Source: 29 June, Department of Statistics Malaysia)

Malaysia’s Consumer Price Index, May 2020

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

(Source: 24 June, Department of Statistics Malaysia)

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