Economic growth momentum expected to slow slightly due to geopolitical conflict — DOSM

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KUALA LUMPUR (March 25): Malaysia’s Leading Index (LI), a predictive tool used to anticipate economic upturns and downturns in an average of four to six months ahead, indicated that the country’s economic growth momentum country will be a little slower due to geopolitical conflict, among others.

The Department of Statistics Malaysia (DOSM) said the LI remained above 100.0 points at 110.1 points in January 2022, with the LI year-on-year (year-on-year) increasing by 0 .02%, mainly supported by the number of new businesses registered.

“Growth prospects are in line with the full reopening of international borders as the country moves into the endemic phase [of Covid-19]alongside the implementation of the new minimum wage of RM1,500, both of which are expected to increase consumption and support domestic demand.

“However, the [Russia-Ukraine] geopolitical conflict and the lockdown of major Chinese cities impose downside risks to the economic outlook if both incidents are prolonged,” Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said in a statement Friday (March 25).

It indicated that on a monthly basis (mom), the LI decreased by 1.2% against 0.5% recorded in December 2021, mainly influenced by a decline in real imports of semiconductors (-0.6%). and the number of housing units approved (-0.5%).

Meanwhile, the department said the rapid spread of the Omicron variant of Covid-19 is not expected to have a significant effect on gross domestic product growth.

The DOSM said the coincident index (CI) in January 2022 rose 5.5% year-on-year from 111.3 points to 117.4 points, and was 2.5% higher than compared to 114.5 points in December 2021.

CI growth was driven by an increase in capacity utilization in manufacturing (2.7%), the retail trade volume index (0.2%) and real contributions to the Employees’ provident fund (EPF) (0.1%).

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