MONTHLY NEWS SCAN

Tinjauan Berita Bulanan Compiled by IDS

Vol. 24 Issue 12 IDS Online http://www.ids.org.my 1 – 31 December 2019

HIGHLIGHTS from leaving the EU, analysis for ANZSCEP, Singapore's first and New FOCUS BBC Newsnight has suggested. Zealand's second bilateral Free Trade Independent trade experts from the Agreement (FTA) that became • Trump ‘signs off’ on deal to pause UK Trade Policy Observatory effective Jan 1, 2001, the Ministry for US-China trade war (UKTPO) looked at the likely impact Trade and Industry said on Monday • South-east Asia may soon need a of US, Australian and New Zealand (Dec 30). The agreement will address ‘Plan B’ to deal with low free trade deals. They found that even modern trade issues and improve trade inflation: S&P Global Ratings combined, new tariff-cutting rules and provisions that are in line • ‘ on track towards agreements were likely to boost the with newer FTAs that Singapore and developed nation status’ UK economy by just 0.4%. (11 New Zealand have entered into. (30 • Malaysia enters new era of December, BBC News) December, The Straits Times) economic momentum with Bandar Malaysia revival - IQI Global Trade disputes settlement system Australia government downgrades • Japanese firm inks RM100m facing crisis: The World Trade outlook for economy, budget investment in Lahad Datu POIC Organization is facing a crisis in its surplus: Australia’s conservative • Mega Free Trade Zone to be set up system for resolving disputes between government recently cut its outlook in Putatan its members. It has an appeal "court" for growth in the economy and wages that is the final arbiter on such as part of a A$33 billion downgrade to INTERNATIONAL disputes and which is about to become expected revenues over the next four ANTARABANGSA unable to function. WTO rules say years. Weak household spending and three judges have to hear each case. stagnant wage growth were blamed Trump ‘signs off’ on deal to pause On 10 December the number goes for the miss, though strong company US-China trade war: Asian stock below that level. Only one will be left. tax receipts and the falling cost of markets rose as the US and China The terms of the other two come to an borrowing provided a timely buffer. moved toward striking a trade deal to end, and no replacements have been (16 December, Reuters) avert a new round of tariffs. The deal chosen. (8 December, BBC News) could be announced after US French growth to keep mostly President Donald Trump reportedly South Korea Dec. inflation up, but steady through mid 2020: INSEE: signed off on the terms. Washington is 2019 rate tumbles to record low: France’s economy is set to maintain a said to have agreed to remove some South Korea’s consumer prices rose largely steady pace of growth through tariffs, while Beijing would boost 0.7% in December from a year earlier, to the middle of 2020, dipping only purchases of US farm goods. (13 much faster than in the previous slightly at the start of the year as trade December, BBC News) month and just a notch above the weighs, the INSEE stats agency market’s expectations, official data forecasted. The euro zone’s second South-east Asia may soon need a showed. Compared with a month biggest economy was on course for ‘Plan B’ to deal with low inflation: earlier, the consumer price index rose growth of 0.3% in the final three S&P Global Ratings: South-east 0.2% in December, the data from months of the year, unchanged from Asia is set for another year of low Statistics Korea showed. The median the previous quarter and from inflation, generating difficult choices forecast from a Reuters survey was for INSEE’s previous forecast, it said in for the region's central banks. S&P the index to rise 0.6% in December its quarterly economic outlook. (18 Global Ratings sees inflation on-year, up from a 0.2% gain in December, Reuters) remaining below central bank targets November, and by 0.1% on-month, in most cases in 2020, according to compared with a 0.6% fall. (31 Japan’s output and retail sales fall, Shaun Roache, S&P's chief APAC December, Reuters) signalling economic strains: Japan's economist in Singapore. industrial output slipped for the Policymakers may soon have to think New Zealand-Singapore upgraded second straight month in November, about using tools other than interest economic agreement ratified: The raising the likelihood the economy rates to achieve their policy goals, he upgraded Agreement between New will contract in the fourth quarter due said. (20 December, The Straits Zealand and Singapore on a Closer to slowing demand abroad and at Times) Economic Partnership (ANZSCEP) home. Japan’s economy has cooled in has been ratified by the two nations recent months due to a prolonged hit Brexit: Free trade deals ‘won’t and will enter into force on Jan 1, to exports from soft global demand offset leaving EU’: Post-Brexit trade 2020. The upgraded agreement adds and a slide in consumer spending deals will not make up for the e-commerce and regulatory following a nationwide tax hike. (27 economic damage inflicted on the UK cooperation chapters to the December, The Straits Times) 1 – 31 December 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 2020 Article IV Consultation with and Industry statement. (13 NATIONAL Malaysia. (19 December, ) December, The Star)

NASIONAL Inflation to rise to 2.4 pct in 2020 on Malaysia’s GDP revised downward

‘Malaysia on track towards petrol subsidy policy - MIDF to 4.5 pct for 2020: World Bank: developed nation status’: The Research: MIDF Research expects Malaysia’s economy is expected to increase in the number of inflationary pressure to surge to 2.4 expand at relatively moderate pace establishments operating in the per cent year-on-year (y-o-y) in 2020 despite the continued uncertainty and wholesale and retail trade sector, mainly due to the government’s petrol external headwinds, predicts World coupled with the higher Internet usage subsidy policy. Inflation in 2019 is Bank Group. “We expect private among them, shows that Malaysia is estimated to settle at around 0.6 per consumption to be the primary anchor moving towards a developed nation cent y-o-y, which is lower than one of Malaysia’s growth for next year as status, according to the Department of per cent in 2018. Head of Research well as a return of positive Statistics Malaysia. Citing the Mohd Redza Abdul Rahman said the contribution in terms of trade and Preliminary Report Wholesale and price of RON95 had been capped at investment, although the performance Retail Trade Census 2019 (WRC RM2.08 per litre since February this will still be relatively subdued given year, lower than the average price of 2019) launched recently, Chief the uncertainties around global growth Statistician Datuk Seri Dr Mohd Uzir RM2.20 in 2018, instigating and economic activities,” lead Mahidin said the number of downward pressure to the overall economist for macroeconomics, trade establishments operating in wholesale inflation this year particularly through and investment Dr Richard Record the transport index. However, the and retail trade grew 4.8% to 468,930 said. Further, there is also an in 2018 from 370,725 in 2013. “The government’s decision to introduce a anticipation on the acceleration of percentage of Internet usage among new targeted fuel subsidy starting public investment sector over time the establishments jumped to 83.4% in January 2020 would have spillover following the government’s revision 2018 from 72.2% in 2013,”. (28 effects on other basket components of mega-infrastructure projects, he such as food. (17 December, said. (9 December, Business Times) December, The Star) ) Malaysia enters new era of Malaysia's IPI rises 0.3% y-o-y in Malaysia’s Oct exports drop 6.7 per economic momentum with Bandar October: The Industrial Production Malaysia revival - IQI Global: The cent, slower than forecast: Index of Malaysia grew 0.3% in Malaysia's exports fell for the third (PH) government October as compared with the same has sent a very clear message to local straight month in October, though the month last year, underpinned by an and global investors that it will pace of decline was slower than increase in the manufacturing and continue to maintain macroeconomic expected, government data showed. electricity indices. This marked the stability to drive the economy Exports shrank 6.7 per cent in slowest rate of expansion since forward, said IQI Global Chief October, slower than the sharp 12.6 February 2013, when output had Economist Shan Saeed. He pointed per cent contraction forecast by fallen 4.4%, and was well below the analysts in a Reuters poll. In out the revived Bandar Malaysia, with median growth forecast of 1.6% in a an estimated total gross development September, exports had fallen 6.8 per Bloomberg survey of economists. The cent, the biggest drop in three years. value of RM140 billion, would herald Department of Statistics Malaysia said a new era of economic momentum Exports to China, one of Malaysia's in a statement that output in the biggest trade partners, fell 11 per cent that benefited the masses. manufacturing sector rose 2.2% year- “Engagement and collaboration with in October, on lower shipments of on-year (y-o-y) in October, as Chinese companies bring huge electrical and electronic goods, compared to 2.5% in September. (12 petroleum and chemical products and December, The Star) dividends to local players, as they would learn and rewind to align crude oil, data from the International Trade and Industry Ministry showed. Foreign investors return, net inflow themselves with market forces and at RM53.3 mln: Foreign investors efficiency level,”. (25 December, Exports to Southeast Asia, the European Union, and Japan also have turned net buyers in the equities Bernama) market with a net inflow of RM53.31 declined in October, but shipments to Malaysian authorities making the United States were up 2.7 per cent. million in the Dec 23-26 period progress on reform agenda, says (4 December, Business Times) against an outflow of RM57.7 million IMF: The Malaysian authorities are a week earlier, as the United States- making progress on their reform Govt approves 4 manufacturing China trade dispute gradually agenda, with real gross domestic projects worth RM5.4b: The dissipated. However, local retail funds product (GDP) growth holding up and government has approved four were net sellers at RM30.08 million is projected at 4.5 per cent for 2019, manufacturing projects worth during the period, switching from driven by domestic demand, said the RM5.4bil in , , being net buyers of equities worth International Monetary Fund (IMF). and which will create over RM13.4 million during Dec 16-19, Malaysia's headline inflation is 1,000 job opportunities. One of the while local institutional funds were expected to remain subdued at slightly approved projects was an investment net sellers at RM23.23 million after under one per cent this year while the worth RM2bil by a multinational glass picking up RM44.3 million net in the current account surplus is expected to manufacturer to produce float glass previous week’s corresponding and photovoltaic functional glass at increase to 3.5 per cent of GDP in period. Bank Islam Malaysia Bhd 2019, it said in a statement. The the Industrial Park. Chief Economist Dr Mohd Afzanizam “This investment is expected to create statement was issued after the IMF Abdul Rashid said the US markets team led by Nada Choueiri visited over 1,000 job opportunities, whereby continued to reach record highs led by 80% will be ,” according and on Dec the technology sector. (29 December, 5-17 to conduct discussions for the to the Ministry of International Trade Bernama) 1 – 31 December 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 2

Micro dam gives light to Kg RM9.5b oil storage, refinery facility LOCAL Buayan-Tiku (Penampang): The to be built in Sipitang: State-owned TEMPATAN folks in Kg Buayan-Tiku, 18km from Sabah Oil and Gas Development Penampang township and barely Corporation (SOGDC) Sdn Bhd has Japanese firm inks RM100m accessible during rainy weather now signed an agreement with a private investment in Lahad Datu POIC: enjoy electricity for lighting the 20-30 firm to build Sabah’s first petroleum Sabah’s investment mission to Japan households, refrigerators and oil storage and refinery facility with saw a RM100 million investment appliances made possible by Shell, investments over US$2.3 billion agreement from Blue Capital NGO Tonibung and Pacos Trust. The (RM9.5 billion). The agreement with Management Co. Ltd (Blue Capital), a supply is from a micro hydro system Petroventure Energy Sdn Bhd will see Tokyo-based company engaged in whose construction is based on the the plant being built at the Sipitang Oil biomass energy use, being adaption of a hydro dam. But instead and Gas Industrial Park (Sogip) in finalised. The investment was inked of blocking the whole river flow, the southwest Sabah, with construction through an agreement signed between existing river flow is divided where expected to take between three and Lahad Datu Palm Oil Industry Cluster half is redirected to a small dam which five years. Deputy Chief Minister (POIC) and a local company, is then channeled to the turbine , who is also Bloosom Bio Energy Sdn Bhd generators via pipes. The water that state trade and industry minister, (BBE). The historic agreement was helps spin the turbines is channeled witnessed the signing of the witnessed by Chief Minister Datuk back to the main river flow which agreement between SOGDC CEO Seri Mohd , Deputy makes the system capable of Geaneve Jane and Petroventure Chief Minister Datuk Seri Wilfred producing energy such as the hydro Energy president-cum-managing Madius Tangau and State Secretary dam but on a micro scale without director Mohd Sham Mohd Yassin in Datuk Safar Untong. (5 December, neglecting or disrupting the original Kota Kinabalu. (14 December, Daily Daily Express) river flow. (3 December, Daily Express) Express) Mega Free Trade Zone to be set up Rainwater project for Pitas in Putatan: A Free Trade Zone RM380m Pagalungan road project: folks: A centralised rainwater (FTZ) with premium outlets will be State Infrastructure Development harvesting project in Kg Suang set up in Putatan. Some 100 acres will Minister, Datuk , said Duyung has benefited some 230 be dedicated to this mega project the construction of the 35-kilometre residents in the village. The project is where outlets and stores will be sited road linking Kg Pengkalan Salung and due to the initiative of Persatuan within the area upon its completion, Pagalungan sub-district will begin in Bantuan Perubatan Malaysia (Mercy according to Bersatu Putatan Division May next year and expected to take Malaysia), United Motor Works Chief Datuk Arsit Sedi. He said he about three years to complete. The (UMW) and Gerak Saga Sdn RM380 million project will also Bhd. Residents said it was a relief as had spoken to relevant authorities involve the construction of six bridges they no longer had to endure hardship such as the Malaysian Customs over several rivers. “This road will especially during the dry Department and they had been very give positive economic impact to the season. Their spokesperson, Marius helpful in providing information on people of Pagalungan and its Mokinson, 44, who is also the Village the matter. “The development will not surrounding areas and definitely will Community Management Council only generate business and enhance their living status, which is in head, said in addition to providing two employment opportunities but also be line with the government aspiration to water tanks to each house, villagers a tourism attraction,” he said. Arsit reduce the socio-economic gap were also provided with water said more than 100 acres have been between urban and rural areas,”. (6 collection point located at the centre identified for the project to develop December, Daily Express) of the village. (10 December, Daily the area into a tourism attraction. (23 Express) December, Daily Express) Tangau outlines plans for industrial Sabah by 2030: The State One PPR project in Sabah next RM2b glass project at KKIP Government has outlined several year: The Housing and Local approved: Leiking: The National plans in an effort to transform Sabah Government Ministry will build 14 Investment Committee (NCI) has into an industrial state by 2030. People’s Housing Programme (PPR) approved a manufacturing project Deputy Chief Minister Datuk Seri projects throughout Malaysia next worth RM2 billion which will be Wilfred Madius Tangau who is also year, said its Secretary-General Datuk located at the Kota Kinabalu Trade and Industry Minister said Seri Mohammad bin Mentek. Of the Industrial Park, said Minister of among the plans were to create a 14, one would be in Lahad Datu, in International Trade and Industry conducive, pragmatic investment Sabah’s east coast. “14 PPRs are to be Datuk . Leiking said the ecosystem in terms of manufacturing built by next year and Sabah will have and achievement of targets, one coming up in Tungku, Lahad NCI had approved four projects worth programmes, activities and initiatives. Datu. It will have about 500 units,” he RM5.4 billion in the manufacturing He added that this would also include told a press conference after sector in Sabah, Johor, Selangor and facilitating foreign direct investment officiating the #TrashToCash Eco- Penang. “One of the projects approved (FDI) and domestic investment into Community Programme at PPR was a RM2 billion investment by a Sabah, enhancing the State’s efforts to Taman Sri Keramat, Putatan, multinational glass company to attract investors, while also focusing recently. Mentek said besides the produce float and photovoltaic glasses on investment missions to selected additional PPR project in Tungku next at the Kota Kinabalu Industrial Park,” countries such as China, South Korea, year, there are currently seven PPR said Leiking on his Facebook Japan and the US. (21 December. projects underway in Sabah. (9 page. (13 December, Daily Express) Daily Express) December, Daily Express)

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SELECTED FACTS AND FIGURES FAKTA MUTAKHIR

Malaysia’s External Trade Statistics, October 2019

(Source: 4 December, Department of Statistics Malaysia)

Malaysia’s Producer Price Index, November 2019

(Source: 31 December, Department of Statistics Malaysia)

Malaysia’s Consumer Price Index, November 2019

(Source: 20 December, Department of Statistics Malaysia) 1 – 31 December 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 4

Malaysia’s Monthly Manufacturing Statistics, October 2019

(Source: 12 December, Department of Statistics Malaysia)

Malaysia’s Economic Indicators: Leading, Coincident & Lagging Indexes, October 2019

(Source: 24 December, Department of Statistics Malaysia)

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