Business Economics

Malaysian economy to slow down sharply, huge indicator drop in March

TheMole
Written by TheMole

KUALA LUMPUR — May 22, 2020: Malaysia’s leading indicator (LI) for March recorded its largest monthly drop since November 1991 following the imposition of the movement control order (MCO) on March 18 to try and curb the spread of the Covid-19 pandemic. 

Based on previous global economic crises, the expectation of LI for the next four to six months should reflect the reality of an economic recession.

The Department of Statistics March-edition of Malaysian Economic Indicators: Leading, Coincident & Lagging Indexes showed that the LI declined further to negative 4.9 per cent from a negative 0.8 per cent in February.

The decrease was mainly due to the drop in expected sales value in the manufacturing sector (-1.7 per cent) and number of new companies registered (-1.6 per cent).

Concurrently, the annual change of LI recorded negative 3.6 per cent in March against 1.7 per cent in February.

The sharp drop in the LI reflected the shutting down of non-essential business activities due to the MCO.

“Thus, it is expected that the Malaysian economy will be facing a sharp slowdown in the near future,” said the government’s chief statistician Datuk Seri Dr. Mohd. Uzir Mahidin.

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