MONTHLY NEWS SCAN

Tinjauan Berita Bulanan

Compiled by IDS

Vol. 22 Issue 1 IDS Online http://www.ids.org.my 1 – 31 January 2017

HIGHLIGHTS to higher household and government are driving up salary expectations, FOCUS spending. Estimated figures from its there is little pressure for pay hikes in Federal Statistical Office said gross Japan. The risk is that nascent domestic product was 1.9% higher inflation – forecast to emerge this • World Bank predicts 2.7% last year than in 2015. The annual year on the back of resurgent oil global economic growth in 2017 figure is based on an early estimated prices and a weak yen – erodes • Australia pushes for TPP that growth was around 0.5% in the households’ purchasing power and without U.S. after Trump exits fourth quarter. However, the actual crimps consumer spending. (27 deal fourth quarter figure will not be January, Bloomberg) • Surprise on the upside this year released until early next month. (12 • Higher exports, Bank Negara January, BBC News) New Zealand inflation back on measures will boost ringgit track after 2-year undershoot: New recovery: MoF Eurozone inflation jumps in Zealand inflation accelerated more January: The eurozone’s economy is than economists forecast in the final • Over 1,000 residents benefit showing signs of recovery after the quarter of 2016, rising back into the from Kampung Rumindako latest data pointed to a fall in central bank’s target band for the first water supply project unemployment while growth and time in more than two years. The • RM2.3 bln to improve electricity inflation picked up. Rising energy local dollar jumped. Reserve Bank supply in prices pushed inflation to 1.8% in Governor Graeme Wheeler cut the January, a near four-year high and up official cash rate to a record-low 1.75 INTERNATIONAL from 1.1% in December. Eurostat percent in November and has said ANTARABANGSA data also showed the jobless rate fell that should be sufficient to return to 9.6% in December, the lowest rate inflation to target. (26 January, World Bank predicts 2.7% global since May 2009. GDP growth edged Bloomberg) economic growth in 2017: There up to 0.5% in the final three months will be only a moderate pick up in of 2016, up from 0.4% in the Asia’s smallest economies are global economic growth during 2017, previous quarter. (31 January, BBC among its fastest growing: the World Bank has predicted. Its News) Asia’s smallest economies Global Economic Prospects report is are growing faster than giants like forecasting 2.7% growth compared French economy accelerates, China, according to the World with the 2.3% seen last year. That stoking debate on ECB tapering: Bank. Cambodia, Laos and Myanmar slight strengthening will be driven French growth accelerated in the will post the most rapid expansions in mainly by improvements in emerging fourth quarter as part of a wider Asia after India from 2017 to 2019, markets and developing economies, economic expansion in the region sustaining growth rates of close to 7 the Bank says. But there is that is fueling a debate about how percent, according to forecasts heightened uncertainty after the US quickly the European Central released this week. Among the least Presidential election, according to the Bank should trim stimulus. Gross developed countries, the report. (10 January, BBC News) domestic product rose 0.4 percent in combined size of the three economies the October-December period, is less than $100 billion, about a third Australia pushes for TPP without national statistics office Insee said. of neighbors like Singapore, U.S. after Trump exits deal: That matches the median estimate in Malaysia and Philippines. (13 Australia is leading a push to salvage a Bloomberg survey and compares January, Bloomberg) a Pacific trade deal after U.S. with 0.2 percent growth in the President Donald Trump formally previous three months. Inflation Singapore’s economy expands withdrew as a signatory to the 12- accelerated to 1.6 percent in January, more than economists estimated: nation accord. Prime Minister the most since November 2012, while Singapore’s economic growth Malcolm Turnbull said he discussed a separate release showed price quickened to the fastest pace in more the deal on Monday night with growth in Spain surged to 3 percent. than three years last quarter as Japanese counterpart Shinzo Abe, (31 January, Bloomberg) manufacturing and services and held talks with the leaders of rebounded. Singapore, among Asia’s New Zealand and Singapore. Steven Stingy pay raises pull the most-export dependent nations, is Ciobo, Australia’s trade minister, told handbrake on Japan’s inflation seeking new growth engines to boost ABC Radio on Tuesday a Trans- drive: As the world puts the worst of incomes as its population ages and Pacific Partnership without the U.S. the disinflationary threat behind it, trade falters. With global growth was “very much a live option.” (23 tepid wage growth is shaping up as a under pressure and the U.S. January, Bloomberg) key restraint to a threatening to turn more protectionist genuine reflationary era taking hold under Donald Trump, the outlook Germany’s economy accelerates in in some economies. Nowhere is this remains cloudy. (3 January, 2016: Germany’s economy stepped more so than Japan. Unlike the U.S. Bloomberg) up its pace of growth in 2016, thanks and Germany, where higher prices 1 – 31 January 2017 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 1 December producer price index S. Korea, Malaysia agrees to NATIONAL surges 6.5%: Malaysia’s Producer extend currency swap agreement: NASIONAL Price Index (PPI) for December 2016 South Korea’s central bank said on surged 6.5% from a year ago, mainly Wednesday it agreed with its Surprise on the upside this year: due to a higher cost of production in Malaysian counterpart to extend an The Malaysian economy is likely to agriculture, forestry and fishing, the existing currency swap agreement surprise on the upside this year after Statistics Department said. It said on between the two countries. The new the weaker outlook last year. Credit Tuesday the agriculture, forestry and arrangement, unchanged from the Suisse is confident the macro outlook fishing index recorded a 34.5% jump previous pact that lets either country should improve as commodity prices while mining increased by 11.6%; swap 5.0 trillion won (US$4.29 rebound, benefiting rural households. manufacturing (+3.7%), electricity & billion) for 15 billion ringgit “But we remain concerned about gas (+3.5%) and water supply (US$3.38 billion), will be valid from potential ringgit volatility due to the (+0.4%).“The PPI for local Wednesday to Jan 24, 2020, the Bank United States rate hikes and production by stage of processing of Korea said in a statement. South uncertainty over foreign exchange rose by 3.6% in December 2016 Korea and Malaysia signed their first policies,” it said in a report. It has compared to the previous month,” it swap agreement in 2013, which was maintained its 4.1 per cent growth said. The increases were due to valid for three years. It was set to projection for last year. (16 January, higher costs for crude materials expire last October, but officials from Business Times) which had to undergo further both countries agreed to extend the processing (+12.3%), intermediate swap last year in working-level talks, Higher exports, Bank Negara materials, supplies and components a Bank of Korea official told Reuters. measures will boost ringgit (+2.0%) and finished goods (+0.2%), (25 January, Business Times) recovery: MoF: The Finance it said. (31 January, ) Ministry (MoF) expects the M’sian automotive sales slump to recovering commodity prices and Malaysia’s GDP at 3.8pct in 2017, lowest level in six years: Malaysia’s improving China’s economy, as well says Standard Chartered: Global automotive sales have hit their lowest as measures taken by Bank Negara banking group Standard Chartered level in six years to 580,124 units in Malaysia (BNM) will help lift the expects Malaysia’s gross domestic 2016. However, the Malaysian ringgit to RM4.10 against the US products (GDP) to moderate in 2017 Automotive Association (MAA) dollar by the third quarter of this to 3.8 per cent from a projected 4.2 expects sales to grow slightly to year. Deputy Finance Minister I, per cent in 2016 on the back of 590,000 units in 2017. “The decline Datuk Othman Aziz, said prices of slower domestic demand. “We expect is due to many factors, such as the commodities such as crude palm oil, domestic demand, the main source of stringent hire purchase loan approval rubber and crude oil had shown growth, to soften and moderate by Bank Negara, the economic improvement as compared to last further in 2017. While domestic slowdown, lower consumer spending year thus giving a potential additional demand should partly offset weak and cautious business sentiment,” income from the export market. “We external demand, it is likely to said MAA president Datuk Aishah hope we can get more revenue from soften,” said Edward Lee, Standard Ahmad in a press conference on exports and this will help in the Chartered head of Asean Economic Malaysia’s 2016 automotive sales. strengthening of the ringgit,” he told Research, at the bank’s global Automotive sales for 2016 barely reporters on the sidelines of the research briefing here in Kuala passed the year’s target of 580,000 ACCA Malaysia Sustainability Lumpur today. “The resilience in units. The last time the total industry Reporting Awards (MaSRA) here in consumer demand this year has been volume (TIV) was below the 600,000 today. (10 January, due to one-off measures, and labour mark was in 2009 at 536,906 units. Business Times) metrics appear to be weakening as (19 January, Business Times) unemployment grows and we expect Outlook on M'sian economy in all these will play out in the second MIER lowers M’sia’s growth 2017 ‘cautiously optimistic’: Study: half of the year.” (11 January, outlook to 4.5 per cent in The overall economic outlook for Business Times) 2017: The Malaysian Institute of Malaysia in 2017 appears to be Economic Research (MIER) has cautiously optimistic, as a majority of PMI unchanged in Dec at 47.1, lowered its growth outlook this year firms operating here are anticipating manufacturing sector lagging: The to 4.5 per cent, saying external that investments for business Purchasing Managers’ Index demand is not likely to be as strong expansion will remain unchanged, remained unchanged in Dec at 47.1, as expected. While commodity prices according to Dun & Bradstreet indicating that both production and are showing signs of recovery, the (D&B) Malaysia’s Business new orders in the manufacturing slowdown in global trade and Optimism Index (BOI) study. Results sector declined. The Nikkei Malaysia investment flows is expected to from the study show that BOI has PMI described the manufacturing prolong, warned the think tank’s been in the expansionary region, sector as having deteriorated in the executive director Dr Zakariah Abdul though it has slipped for the third final quarter of 2016. “A decrease in Rashid. “Oil prices are expected to be consecutive quarter to +1.65 total new orders resulted partly from sticky upwards, as the production percentage points in the first quarter a drop in international demand, as agreement is believed to be fragile of this year (1Q17), from +3.83 new export orders declined at the and may fail to bring down the percentage points in the fourth sharpest rate in six months,” it said. supply glut,” he told a media briefing quarter 2016 (4Q16). (9 January, (3 January, Business Times) held to announce the Fourth Quarter Business Times) 2016 GDP outlook. (19 January, Business Times) 1 – 31 January 2017 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 2

had been erected along the route menyebabkan pelaksanaan projek LOCAL heading to Long Pasia – an area terlewat. (15 Januari, Utusan Borneo) TEMPATAN under the Sindumin state constituency – to enhance broadband Lebih RM300,000 dana khas untuk Over 1,000 residents benefit from coverage. (24 January, Daily pendidikan: Arifin: Bagi Kampung Rumindako water Express) memperkasakan lagi pendidikan supply project: More than 1,000 khususnya di kawasan ini, Ahli residents of Kampung Rumindako in Sabah govt approves 690 hectares Dewan Undangan Negeri (ADUN) Kiulu and the surrounding population of land for Lihak-Lihak: The Sabah Membakut telah memperuntukkan will benefit from the free clean water government has approved 690 dana khas lebih RM300,000 bagi supply via the Clean Water Supply hectares of state-owned land in the sekolah-sekolah dalam zon Project. The project using the sub-district of Lihak-Lihak, here in Membakut. Pembantu Menteri portable drinking water membrane Semporna to be given to about 200 kepada Ketua Menteri yang juga filtration system was developed in the deserving families there. Bugaya ADUN Membakut Datuk Arifin Arif village which is located about 31km assemblyman, Datuk Ramlee berkata ia bertujuan membangunkan from Tuaran town. Science, Marahaban said giving the ilmu pendidikan, khususnya di Technology & Innovation (MOSTI) government land through the fast kawasan luar bandar, sekali gus Minister Datuk Seri Wilfred Madius concept was to enable the local melahirkan lebih ramai pelajar Tangau said the clean water supply residents to raise their standard of cemerlang pada masa hadapan. project in question was one living and hence eradicate poverty in Katanya melalui peruntukan itu, programme under the platform of Semporna. “This is the government’s pihak sekolah bukan sahaja dapat MOSTI Social Innovation development agenda by giving merancang program-program implemented by the Malaysian people plots of land to carry out berkaitan pendidikan tetapi mampu Technology Development activities that can help eradicate melaksanakannya dengan lebih Corporation (MTDC), an agency poverty in the district,” he said after a teratur demi manfaat para pelajar. (13 under the ministry. (24 January, New programme with the people, here, Januari, Utusan Borneo) Sabah Times) yesterday. (16 January, New Sabah Times) RM250,000 projek air graviti beri RM2.3 bln to improve electricity manfaat lima kampung mukim supply in Sabah: Energy, Green Rubber smallholders enjoying Bingkor: Lima kampung di mukim Technology and Water Minister, higher income: Deputy Chief Bingkor akan menerima bekalan air Datuk Seri Dr Maximus Ongkili Minister Datuk Seri Panglima Hj melalui projek air graviti. Pengerusi yesterday announced that the Federal Yahya Hussin is happy that Sabah’s Parti Tindakan Demokratik (DAP) Government has allocated RM2.3 rubber smallholders are reaping Sabah Stephen Wong berkata projek billion to improve the electricity higher income. He said the berkenaan bagi membantu penduduk supply system in Sabah within four international price for Standard kawasan terlibat mendapatkan akses years’ time in order to achieve 60 Malaysian Rubber 20 (SMR20) air bersih. “Projek bagi membantu minutes of Interruption Duration increased from its low of RM4.70 per penduduk setempat ini akan Index which is also one of their Key kilogram early last year to RM9.68 melibatkan lima kampung di Mukim Performance Indicator (KPI) this year. per kilogram now. The price increase Bingkor sepanjang 21 kilometer (km). He said the allocation is for grants to was caused by shortage of the “Projek air graviti yang dijalankan improve power generation capacity, commodity in the world market due syarikat Impian Malaysia dan Impian transmission and distribution as well to flooding in southern Thailand, he Sabah ini bernilai RM250,000,” as upgrade wires throughout the state. said. Yahya, who is also Minister of katanya pada sidang media DAP He disclosed that the Interruption Agriculture and Food Industry, added Sabah, di sini kelmarin. (9 Januari, Duration Index in Tawau has been the global price hike had pushed up Utusan Borneo) reduced to 89 minutes in 2016 from the smallholder rubber prices in 160 minutes in 2015. (15 January, Sabah from a low of RM1.50 per Projek PPR Kota Belud berjalan The Borneo Post) kilogram for cuplumps at 50% dry lancar dan siap mengikut jadual: rubber content to a high of RM3.75 Program Perumahan Rakyat (PPR) New telco towers in Long Pasia per kilogram as of now. (21 January, Ulu Pirasan berjalan dengan lancar bridge digital divide: The Borneo Post) dan dijangka kesemua 900 unit Telecommunications facilities in rumah itu akan siap sepenuhnya Long Pasia, about 130km from Empangan air Cinta Mata Tawau mengikut jadual asal. Menteri di Sipitang, has been enhanced through dilaksana dalam masa terdekat: Jabatan Perdana Menteri Datuk the provision of seven Projek empangan air di Gudang berkata, telecommunications towers Empat, Cinta Mata di sini akan kesemua unit rumah itu dijangka siap benefiting nearly 1,000 residents. dilaksana dalam masa terdekat dalam tempoh 36 bulan sejak ia Communications and Multimedia selepas Unit Perancang Ekonomi dilancarkan pada Disember 2014. Deputy Minister Datuk Jailani Johari meluluskan peruntukan siling projek “Projek untuk menyiapkan seunit said the provision of the new towers sebanyak RM640 juta, dua minggu rumah ini melibatkan sejumlah kos proved the Government’s resolve to lepas. Menteri Tenaga, Teknologi lebih kurang RM180,000 ia bridge the digital divide between Hijau dan Air Datuk Seri Dr termasuklah kos pemotongan bukit urban and rural areas, and give users Maximus Ongkili berkata walaupun dan sebagainya (9 Januari, Utusan better communications facilities. projek berkenaan diluluskan dua Borneo) According to him, the seven towers tahun lepas, terdapat perubahan skop 1 – 31 January 2017 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 3

SELECTED FACTS AND FIGURES FAKTA MUTAKHIR

MALAYSIA MONTHLY RUBBER STATISTIC, NOVEMBER 2016

(Source: 12 January, Department of Statistics Malaysia)

(Source: 31 January, Department of Statistics Malaysia)

(Source: 11 January, Department of Statistics Malaysia) 1 – 31 January 2017 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 4

(Source: 18 January, Department of Statistics Malaysia)

MALAYSIA CONSUMER PRICE INDEX, DECEMBER 2016

(Source: 18 January, Department of Statistics Malaysia)

1 – 31 January 2017 MONTHLY NEWS SCAN (Tinjauan Berita Bulanan) 5