MONTHLY NEWS SCAN

Tinjauan Berita Bulanan Compiled by IDS

Vol. 24 Issue 2 IDS Online http://www.ids.org.my 1 – 28 February 2019

HIGHLIGHTS acknowledge the rising risk of an number earlier this month. It was in FOCUS interest-rate cut when it delivers its large part the result of a big upward first policy decision of the year. revision of construction data for the While Governor Adrian Orr is remote Yamal region, where a large • Global slowdown leaves growth expected to hold the official cash rate liquefied natural gas facility was weakest since financial crisis at a record-low 1.75 percent on finished last year. (13 February, • US-China trade war: UN warns Wednesday and signal no change for Bloomberg) of ‘massive’ impact of tariff hike some time, he could concede there’s • Malaysian economic growth an increasing possibility of looser US economic growth continues to slow: US economic growth slowed to beats forecasts policy as global growth concerns mount. Traders have ramped up bets an annualised rate of 2.6% in the • Malaysia-China bilateral trade up final three months of 2018, figures 13% in 2018 on a rate cut and are now pricing a 90 percent chance of one by November, show. However, the reading was • Strategic Kudat could become a swaps data show. (12 February, ahead of expectations for a rate of successful regional port – Shafie Bloomberg) between 1.8% and 2%. The pace of • Record RM8.3 bln from growth was below the 3.4% rate seen tourism in 2018 German economy narrowly avoids in the third quarter thanks to a recession: Germany’s economy just slowdown in consumer spending. The INTERNATIONAL about avoided falling into recession growth figures had originally been ANTARABANGSA during the final three months of last due to be released in January, but year. Europe’s largest economy were delayed because of the 35-day registered zero growth during the Global slowdown leaves growth US government shutdown. (28 fourth quarter of 2018, the country’s February, BBC News) weakest since financial crisis: Federal Statistics Office said. That The global economy’s loss of means it avoided two consecutive Australian construction work digs momentum has left expansion now quarters of contraction, which is the a hole for the economy in fourth looking like its weakest since the usual definition of a recession. A quarter: Construction spending in global financial crisis, a development weak trade performance dragged on Australia took a surprise spill last that’s already sparked a dramatic the economy, and consumer spending quarter as infrastructure came off the shift among central banks. A UBS remained subdued. (14 February, boil and home building hit a one-year model suggests world growth slowed BBC News) low, a disappointing result that adds to a 2.1 percent annualized pace at to signs of a struggling economy. It the end of 2018, which it says would Euro weakens as slowdown fears was the second straight quarter of be the weakest since 2008-2009. An grow: The euro fell on Tuesday as sharp falls and challenges the dogged early reading for this quarter shows a investors shifted their focus from optimism of the Reserve Bank of slight improvement, but the numbers progress in U.S.-China trade talks to Australia (RBA) that growth will still mean there’ll need to be a an economic slowdown in the pick up this year. The value of dramatic improvement to reach the eurozone. The single currency was construction work done slid 3.1 3.2 percent pace UBS has forecast for buoyed on Monday as expectations percent in the December quarter, data the three months as a whole. (18 grew for an easing of the U.S.-China from the Australian Bureau of February, Bloomberg) trade conflict. But euro zone bond Statistics showed. (27 February,

US-China trade war: UN warns of yields, notably those of German Reuters) bunds, fell amid the cloudy European ‘massive’ impact of tariff hike: A Sterling slips ahead of UK GDP, UN trade official has warned a US economic outlook, and that weighed on the euro. (19 February, Reuters) manufacturing data: Sterling fell plan to raise tariffs on Chinese goods towards $1.29 on Monday as traders next month would have “massive” Russia’s growth expectations fall trimmed their positions before the implications for the global economy. back to earth: Whether or not release of a batch of economic data The US plans to increase tariffs on you believe the Russian Economy following signs the British economy Chinese goods if the two sides fail to grew 2.3 percent last year, beating the is slowing down in the face of Brexit make progress on a trade deal by 1 most optimistic expectations, the uncertainty. Manufacturing output for March. The comments followed a Russian Economy Ministry doesn’t December, as well as GDP data for report by a UN trade agency on the want anyone to expect a repeat in impact of the US-China trade war. It the last three months of 2018, will be 2019. That doesn’t mean there will be released at 0930 GMT. Analysts said Asian countries are likely to no baffling statistical anomalies this polled by Reuters are expecting suffer most from protectionism. (5 year, only that, realistically, February, BBC News) there’s no reason for a rapid quarter-on-quarter economic growth of 0.2 percent against 0.6 percent for New Zealand’s Central Bank could economic expansion. Russia’s official statistical agency, Rosstat, where the previous quarter. (11 February, be the next to turn dovish: New Reuters) Zealand’s central bank may a new boss took over in December, reported the surprising growth 1 – 28 February 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 industrial production growth in January. The headline Nikkei NATIONAL December 2018 hints at a stronger Malaysia Manufacturing Purchasing NASIONAL economic expansion for Malaysia in Managers’ Index (PMI), a composite the fourth quarter of 2018, according single-figure indicator of Malaysia-China bilateral trade up to MIDF Research. Led by stronger manufacturing performance, 13% in 2018: Bilateral trade between manufacturing sector performance, registered 47.9 in January, up from Malaysia and China climbed to an the country’s industrial production 46.8 in December, extending the all-new high in 2018, rising 13% to index (IPI) for December 2018 rose current period of contraction to four US$108.6bil (RM443bil) from by 3.4%, beating a Bloomberg survey months. Export sales also declined, US$96bil (RM392bil) in 2017, with of 2.7%. In November 2018, the IPI while easing demand pressures the number of Chinese visitors into increased at a slower pace of 2.6%. enabled firms to reduce backlogs of Malaysia increasing 29% to 2.94 MIDF Research expects Malaysia’s work. IHS Market said in a statement million last year. Malaysia-China gross domestic product (GDP) to that “Although there was a marginal Business Council chairman Tan Kok expand at a stronger pace of 5% in up-tick in employment, costs were Wai said overall relations between the fourth quarter of 2018, “given cut elsewhere as input buying Malaysia and China remain on the that overall IPI growth averaged at decreased and stocks were scaled right track despite the controversies 3.5% year-on-year, the fastest since back”. (5 February, The Star) regarding some local large scale second-quarter 2018”. (12 February, December industrial output up projects in the country. “Today, The Star) under the circumstances of the 3.4%, exceeds forecast: Stronger ceaseless China-US trade war and the Guan Eng upbeat on economy manufacturing growth enabled the uncertainty of the global economic after January CPI data, more jobs industrial production index (IPI) for outlook, we must remain cautious yet created: Finance Minister Lim Guan December, 2018 to increase by 3.4%, optimistic and work diligently in a Eng expects the country to grow a exceeding a Bloomberg survey of a practical and realistic spirit,” he said further 4.9% this year amid a decline 2.7%. Chief Statistician Datuk Seri in his speech at a Chinese New Year in inflationary pressure while an Dr Mohd Uzir Mahidin said on luncheon yesterday. (19 February, additional 41,000 quality Monday the growth in December The Star) manufacturing jobs are expected to 2018 was driven by the increase in be created in the next two years. In a manufacturing index (4.4%), Malaysian economic growth statement released on Sunday, he said electricity index (2.7%) and the beats forecasts: Malaysia’s the January 2019 Consumer Price mining index (1.0%). Manufacturing economic growth in the fourth Index (CPI) – which fell to the lowest sector output increased by 4.4% in quarter of 2018 (4Q18) has surpassed in nearly 10 years – did not arise December 2018 after expanding by expectations, as the country’s gross from any weakening of demand or 3.7% in November 2018. domestic product (GDP) grew 4.7% economic growth. “Instead, the price Underpinning manufacturing’s year-on-year (y-o-y). This marks the decline was largely caused by supply growth in December were electrical economy’s first acceleration in factors in the form of cheaper input and electronic equipment products growth over the last one year, cost, specifically cheaper fuel (7.2%), transport equipment and following the continued slowdown in prices,” he said. (24 February, The other manufactures products (7.0%) GDP growth after 3Q17 where it Star) and petroleum, chemical, rubber and registered a 6.2% growth. In 4Q17, it plastic products (3.6%). (11 Malaysia’s inflation to average grew by 5.9%. An earlier Bloomberg February, The Star) survey had predicted a median GDP between 1.6% to 2% in 2019: growth of 4.5% in 4Q18, marginally Finance Minister Malaysia Jan CPI slips 0.7% on higher than the 4.4% growth expects the country’s inflation rate to lower fuel prices: Malaysia’s registered in 3Q18. (15 February, The average between 1.6 per cent and 2.0 Consumer Price Index (CPI) Star) per cent this year due to global decreased 0.7% year-on-year in uncertainties caused by the trade war January to 120.5, underpinned by Consumer confidence dips in Q4 between the United States and China. lower fuel prices in the transport 2018: Malaysia has posted the “We are projecting the inflation rate sector. According to Reuters, the biggest year-on-year gain in to be around 1.6 per cent for 2019...if decline in Malaysia’s CPI was the Nielsen’s consumer confidence the US-China trade escalates then it first in over a decade. The survey in 64 countries. The 24-point could go up to 2.0 per cent, but, we Department of Statistics Malaysia gain for an index score of 118 points are still finalising the final figure,” he said that on a month-on-month basis, in the fourth quarter of 2018 puts it told a press conference here in the index also decreased 0.5% as seventh in the Conference Board Georgetown today. However, he said compared to December 2018. The Global Consumer Confidence the 2.0 per cent inflation rate was still decrease in the overall index was Survey, highlighting ’ considered very low compared with attributed to the transport index, optimism on the country’s economic 2017 and the country’s inflation rate which fell 7.8% due to the lower outlook. Nielsen said while there was for 2019 would depend on the global average price of RON95 during the a nine-point decrease from the scenario. (1 February, The Star) month, which recorded RM1.98 per previous quarter, the country has still litre as compared to RM2.28 a year Manufacturing sector in fourth posted the biggest year-on-year gain ago. RON97 meanwhile fell to month of contraction: The among the 64 countries measured in RM2.28 per litre versus RM2.55 Malaysian manufacturing sector the Consumer Confidence Index while diesel was RM2.12 per litre began 2019 with a fourth successive (CCI). (15 February, Business Times) from RM2.31 in January 2018. (22 monthly deterioration in operating February, The Star) High IPI hints to firmer economy conditions, with output and new in Q4: The higher-than-expected business both declining during 1 – 28 February 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 2

account of every state assemblyman electricity facilities, getting on the LOCAL after the signing of the Letter of target of increasing the construction Pledge to ensure that the elected of Projek Perumahan Rakyat TEMPATAN representatives distributed the aid Termiskin (PPRT) homes, as well as Strategic Kudat could become a directly to the targeted groups new bridges and upgrading rural successful regional port – Shafie: according to criteria and in roads that are still in poor condition. Kudat with its strategic location has compliance with the stipulated (25 February, New Sabah Times) procedures. (13 February, New Sabah all the characters to become a Landasan kereta api dari Tenom- successful port that can serve the Times) Melalap akan dibina semula: region. The Sabah government hopes New rural devt strategy being Peter: Landasan kereta api dari to turn it into a reality, with a study drawn up – Ewon: The State Rural pekan Tenom ke Melalap akan dibina being carried out to look into the full Development Ministry is in the midst semula kata Menteri Pembangunan potential of Kudat port, which will of drafting a new strategy in its quest Infrastruktur Datuk Peter Anthony. have railway links, says Chief to revamp the development of the Katanya, pelancarannya akan Minister Datuk Seri Mohd Shafie rural areas in Sabah, said its minister disempurnakan Ketua Menteri Datuk Apdal. Speaking to reporters after Datuk Ewon Benedick. He said such Seri Panglima Mohd launching the Sandakan port jetty move was vital in improving the pada 31 Mac depan. Peter yang juga extension on Thursday, Shafie said current rural development plan that Ahli Dewan Undangan Negeri the Kudat undertaking would be was drafted 21 years ago. Once the (Adun) Melalap berkata, pembinaan capital intensive, but it would not new strategy had been drafted, the semula landasan kereta api yang telah only serve the shipping industry but State’s rural development plan would wujud sejak pemerintahan British also commodity and tourism meet the needs of the people of the lagi bukan sahaja dapat industries. (22 February, New Sabah day, said Ewon, who was speaking at menghubungkan Tenom ke Melalap Times) his ministry’s Bengkel Hala Tuju tetapi sekali gus dapat

Record RM8.3 bln from Sabah (Roadmap Workshop) closing menghubungkan Melalap ke Beaufort tourism in 2018: The Sabah tourism ceremony yesterday. He said such dan seterusnya ke Kota Kinabalu. (22 workshop would further spark more Februari, New Sabah Times) industry’s 2018 report card recorded its highest receipts in history at new ideas and strategies for Sabah. (20 February, The Borneo Post) Increased trade to boost S’kan RM8.342 billion and a record-high economy – Tangau: The State 3.879 million arrivals. Quoting K’jaan peruntuk insentif MSPO Government is committed to statistics compiled by the Sabah RM130 juta ringankan beban improving its trade relations with the Tourism Board (STB) under the pekebun kecil: Kerajaan Philippines and Indonesia in an effort Ministry of Tourism, Culture and memperuntukkan insentif Skim to revamp the economy of Sandakan. Environment, its minister Datuk Pensijilan Minyak Sawit Mampan Deputy Chief Minister cum Trade said the figures Malaysia (MSPO) and Industry Minister Datuk Seri showed that the January to December sebanyak RM130 juta kepada Panglima overall arrivals grew by 5.3 per cent pekebun kecil bagi meringankan said the State Government was while tourism receipts increased by beban yang ditanggung untuk determined to redevelop Sandakan’s 6.6 per cent compared with 2017 pelaksanaan mandatori skim economy by exploring and improving (RM7.83 billion). Overall gross pensijilan MSPO. Ahli Parlimen the district’s existing resources and international arrivals recorded a Tenom, Noorita Sual berkata, industri opportunities. “Among the measures double-digit increase of 10.2 per cent sawit pada masa kini menghadapi to be taken is to increase trade while domestic arrivals increased by pelbagai cabaran, sama ada dari relations between Sandakan and its 2.8 per cent. Liew, who is also dalam mahupun luar negara neighbouring countries – the Deputy Chief Minister, said the top terutamanya berkaitan isu Philippines and Indonesia, especially market source China surpassed its kemapanan. Katanya, minyak sawit in the industrial, manufacturing, half million mark when a total of dilabelkan sebagai penyumbang processing and tourism sectors,” said 593,623 Chinese visitors came to kepada penyahutanan, kemusnahan Tangau. (23 February, The Borneo Sabah in 2018. (20 February, The alam sekitar dan mengancam habitat Post) Borneo Post) hidupan liar yang menjejaskan imej Sabah akan pelbagaikan industri 38 elected Sabah reps receive minyak sawit Malaysia. (15 Februari, New Sabah Times) sebagai sumber ekonomi baharu: RM100,000 each to help the needy: Kerajaan Sabah merancang untuk A total of 38 Sabah state New plan aims to have all villages mempelbagaikan industri termasuk assemblymen received an allocation equipped with water and membuka peluang kepada sektor of RM100,000 each to help the electricity: The new Rural automotif berkembang di negeri itu underprivileged in their respective Development Plan, which has been bagi menjadikan ia sebagai sumber areas through the Special Assistance revised and updated after 21 years, pendapatan baharu ke arah for the Needy 2019 programme. State targets to have all rural villages merancakkan lagi pembangunan Health and People’s Wellbeing throughout Sabah enjoy water and ekonomi negeri. Timbalan Naib Minister Datuk Stephen Wong Tien electricity facilities by 2035. In the Presiden Pihak Berkuasa Fatt said the special aid, which was conjunction with the new plan, the Pembangunan Ekonomi dan considered an outright grant, could be state government has launched 10 Pelaburan Sabah (SEDIA) Iwan used to reduce the people’s burden, key areas of expertise and 316 keys Masrul berkata langkah itu juga including victims of disasters or of performance indicators (KPIs). bertujuan membuka lebih banyak accidents, deaths, chronic patients “Among the guidelines that touches peluang pekerjaan kepada rakyat di and to repair damaged homes. He on Sabah’s infrastructure negeri itu terutama dalam kalangan said the RM3.8 million total development in 2035, which the graduan bidang teknikal, kejuruteraan allocation, approved by the Finance government targets for rural villages dan vokasional. (28 Februari, Utusan Ministry, would be credited into the are to get the necessary water and Borneo) 1 – 28 February 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 3

SELECTED FACTS AND FIGURES FAKTA MUTAKHIR

MALAYSIA’S ECONOMIC PERFORMANCE FOURTH QUARTER 2018

(Source: 14 February, Department of Statistics Malaysia)

(Source: 11 February, Department of Statistics Malaysia)

(Source: 11 February, Department of Statistics Malaysia)

1 – 28 February 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) MALAYSIA’S INTERNATIONAL INVESTMENT POSITION, FOURTH QUARTER 2018

(Source: 14 February, Department of Statistics Malaysia)

MALAYSIA’S CONSUMER PRICE INDEX, JANUARY 2019

(Source: 22 February, Department of Statistics Malaysia)

1 – 28 February 2019 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan)