MONTHLY NEWS SCAN Tinjauan Berita Bulanan Compiled by IDS Vol. 25 Issue 12 IDS Online http://www.ids.org.my 1 – 31 December 2020 HIGHLIGHTS unemployment benefits unexpectedly economy had shrunk 5.8 per cent in FOCUS fell last week, though remaining the third quarter. (31 December, The elevated as more businesses face Straits Times) restrictions and consumers hunker • Southeast Asian economies to experience bumpy recovery down amid an explosion of new Australia hails faster economic before strong rebound in late COVID-19 cases. The raging recovery as COVID-19 outbreak 2021 pandemic and delays by Congress to approve another rescue package are suppressed: Australia’s economy • Chinese economy to overtake US will recover from its first recession in ‘by 2028’ due to Covid sapping energy from the economy as the curtain closes down on a brutal three decades faster than previously • Economic recovery likely in early anticipated after containing the spread months of 2021 – DoSM year. (23 December, Reuters) • Malaysia’s exports recovery still of COVID-19, the government firm Japan’s economy needs years to projected. Updating the budget • Focus on three main sectors return to pre-pandemic levels: outlook, Treasurer Josh Frydenberg • Project to replace Papar dam Reuters poll: Japan’s economy will said the country’s A$2 trillion ($1.5 suffer a smaller contraction this year trillion) economy will grow 4.5% in INTERNATIONAL than initially forecast but won’t return 2021, up from a previous estimate of to pre-coronavirus pandemic levels ANTARABANGSA until at least early 2022, economists in 4.25% made just two months before. a Reuters poll said. Analysts polled Unemployment, which effectively Southeast Asian economies to were split on the Bank of Japan’s next peaked above 10%, will recover to experience bumpy recovery before policy move even as the economy pre-COVID-19 levels of around strong rebound in late 2021: continues to suffer from the 5.25% within four years, he said. (17 Prolonged lockdowns and social pandemic’s fallout, underscoring a December, Reuters) distancing measures are forecast to widening view that the central bank cap global gross domestic product may have exhausted its ammunition to (GDP) growth this year, making it prop up growth. (15 December, South Korea cuts growth outlook, unlikely that a return to pre-COVID- Reuters) vows to maintain stimulus for 19 economy growth and trade activity Covid-hit economy: South Korea cut to take place before late 2021. In Euro zone economy exceeded its 2021 growth forecast and vowed to Southeast Asia, growth will likely be expectations in Dec but still shrank continue to support workers and constrained by social distancing -PMI: Euro zone economic exporters as a resurgence of the measures, but restrictions will performance far exceeded expectations this month - although it coronavirus has delayed its recovery continue to be eased next year, still contracted slightly - as a second and forced the government to keep its especially in economies that are able wave of coronavirus infections and fiscal taps wide open. Gross domestic to roll out vaccines relatively quickly, renewed lockdowns had less of an product is expected to grow 3.2 per the Institute of Chartered Accountants impact than earlier in the year, a cent in 2021, the finance ministry said in England and Wales (ICAEW) said. survey showed. Euro zone economic in a recent statement, down from a (23 December, Bernama) performance far exceeded previous estimate for 3.6 per cent expectations this month - although it growth, as the country faces a third Chinese economy to overtake US still contracted slightly - as a second wave of coronavirus infections. (17 ‘by 2028’ due to Covid: China will wave of coronavirus infections and renewed lockdowns had less of an December, The Straits Times) overtake the US to become the impact than earlier in the year, a world’s largest economy by 2028, five survey showed. (16 December, German economy to shrink 1% in years earlier than previously forecast, Reuters) a report says. The UK-based Centre Q4, more in Q1 – DIW: The second hard lockdown imposed in response to for Economics and Business Research Singapore economy to shrink again (CEBR) said China’s “skilful” a surge in coronavirus infections will in Q4, but less sharply: Poll: hit the German economy this winter, management of Covid-19 would boost Singapore's economic contraction is its relative growth compared to the US the DIW research institute said, expected to have moderated in the forecasting that output would fall 1% and Europe in coming years. fourth quarter, as the city-state lifted in the final quarter of this year. The Meanwhile India is tipped to become more coronavirus-related curbs due to a drop in local infections. Gross think tank said that though the the third largest economy by 2030. (27 economy had made up much of the December, BBC News) domestic product (GDP) is seen falling 4.5 per cent from the same ground it had lost during the first period a year earlier, according to the lockdown from March, the newly U.S. economy losing speed as year median forecast of economists in a imposed restrictions would once again winds down: The number of Reuters poll, marking the fourth impose serious costs. (21 December, Americans filing first-time claims for straight quarter of decline. The Reuters) 1 – 31 December 2020 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) China remains Malaysia’s largest Malaysia’s trade surplus surges 152 NATIONAL trading partner for 11th year: China pct to RM16.82 bln in November: NASIONAL became Malaysia’s largest trading Malaysia’s trade surplus surged 151.6 partner for the 11th consecutive year per cent year-on-year (y-o-y) to Economic recovery likely in early in 2019, with trade valued at RM316.6 RM16.82 billion last month, the months of 2021 – DoSM: Malaysia’s billion, according to the Malaysia highest surplus ever recorded for the economy is expected to continue its Trade Statistics Review (MTSR). In a month of November. The Ministry of journey towards recovery in the early recent statement, the Department of International Trade and Industry Statistics Malaysia (DOSM) said months of 2021, according to (MITI) said exports increased by 4.3 the report provided information on the the Department of Statistics Malaysia per cent to RM84.43 billion compared (DoSM). Citing the recent the Asian current scenario of Malaysia’s trade with China, together with other to the same month last year, Development Bank (ADB) economic marking three consecutive months of report, chief statistician Datuk Seri statistical indicators in the DOSM. Chief statistician Datuk Seri Dr Mohd y-o-y growth. Meanwhile, imports Dr. Mohd Uzir Mahidin fell nine per cent to RM67.61 billion said Malaysia’s gross domestic Uzir Mahidin said the MTSR Volume and total trade shrank by two per cent product (GDP) is projected to fall by II aims to emphasise Malaysia's 6.0 per cent this year before bouncing bilateral trade performance with its to RM152.04 billion, it said in a recent back to 7.0 per cent in 2021. Hence, biggest partner, China. (31 December, statement. (28 December, Bernama) he said it is crucial to find the right Bernama) solution and targeted approach to curb CPI declines 1.7pct yoy in the spread of the COVID-19 Malaysia’s investment approval November 2020, said DOSM: pandemic, while ensuring that the target forecast to hit RM138bil in Malaysia’s Consumer Price Index industry players would not be hugely 2020: Malaysia’s investment approval (CPI) slipped 1.7 per cent year-on- impacted. (24 December, Bernama) target is projected to reach RM138 year (y-o-y) to 120.0 in November billion for the full-year of 2020 2020 from 122.1 recorded in the same Malaysia’s exports recovery still following the total approved month in 2019, said the Department of firm: Malaysia’s exports recovery investments of RM109.8 billion in the Statistics Malaysia (DOSM). In a recent statement, chief statistician remains firm amid the resurgence of first nine-month (9M2020) of the year. United Overseas Bank Datuk Seri Dr Mohd Uzir Mahidin Covid-19 cases globally, economists attributed the lower CPI to the decline said. The country’s exports have been (Malaysia) Bhd (UOB) said the revised forecast is about 32 per cent in several indices, namely, Transport improving steadily since the initial (-11.1 per cent), Housing, Water, shocks from the pandemic in April higher than the actual investments Electricity, Gas and Other Fuels (-3.3 and May this year. This is in line with approved during the global financial per cent), Clothing and Footwear (-0.5 resumption in activities globally and crisis in 2009. “This is a positive sign per cent) and Furnishings, Household particularly benefiting from the that Malaysia remains an attractive Equipment and Routine Household recovery in main trading partner investment destination with ongoing Maintenance (-0.1 per cent) which China. Malaysia’s exports increased efforts by the government to expedite contributed 45.7 per cent to its overall 4.3 per cent to RM84.43 billion in the investment approval process and weight. “Out of 552 items covered in November compared to the same offer competitive incentives,” said CPI, 334 items showed an increase (in month last year, marking three senior economist Julia Goh and prices) in November 2020 as against consecutive months of year-on-year economist Loke Siew Ting in a Global November 2019, while 153 items had (y-o-y) growth. (29 December, Economics and Markets Research. (11 declined and 65 items were Business Times) December,Business Times) unchanged,” he said. (23 December, Business Times) Japan remains optimistic on 12MP to create new sectors, hasten economic relations with Malaysia: high growth industries: Mustapa: November PPI contracts at slower Japan remains optimistic about the The 12th Malaysia Plan (12MP) will pace: Malaysia’s Producer Price development of Japan-Malaysia focus on creating a number of new Index (PPI) production for November economic sectors and accelerating the economic relations in the coming contracted by a smaller pace of 3% development of high growth compared with October due to the years.