Malaysia Inflation Rate Exceeds Forecast in June

Wednesday July 15 2015 Malaysia Inflation Rate Exceeds Forecast in June  Consumer prices in Malaysia rose 2.5 percent year-on-year in June of 2015, up from 2.1 percent in May and above market expectations. It is the fastest inflation since December 2014, as cost of furnishing, household equipment and routine maintenance and recreation & culture increased while a decline in cost of transport eased. Year-on-year, prices rose for: furnishings, household equipment & routine maintenance (+3.2 percent in June from +2.6 percent in May), recreation & culture (+1.7 percent from +1.6 percent) and miscellaneous goods & services (+4.6 percent from +4.4 percent). In contrast, cost declined only for transport (-1.4 percent from -4.7 percent). Prices moderated for: food & non-alcoholic beverages (+3.4 percent from +3.5 percent); clothing & footwear (+0.7 percent from +0.9 percent); housing, water, electricity, gas & other fuels (+2.5 percent from +2.6 percent) and education (+2.6 percent from +2.5 percent). Cost remained unchanged for: alcoholic beverages & tobacco (+11.3 percent); health (+5.0 percent); communication (+2.6 percent) and restaurants & hotels (+4.5 percent). Prices  Among food & non-alcoholic beverages, customers had to pay more for: fruits (+3.0 percent in June from +2.7 percent in May), vegetables (+5.4 percent from +5.3 percent), food away from home (+3.8 percent from +3.7 percent) and food products (+4.8 percent from +4.7 percent). While cost remained flat for oils & fats (+0.7 percent and sugar, jam, honey & chocolate (+2.1 percent), prices moderated for: rice, bread & other cereals (+1.8 percent from +1.9 percent); meat (+3.0 percent from +3.4 percent); fish & seafood (+3.2 percent from +3.5 percent); milk & eggs (+4.6 percent from +5.9 percent) and coffee, tea, cocoa & non-alcoholic beverages (+3.2 percent from +3.5 percent). On a monthly basis, consumer prices accelerated 0.6 percent, following a 0.4 percent rise in the preceding month. Price increases were reported for most categories except clothing & footwear. Transport rose the most by 3.0 percent, followed by furnishing, household equipment & routine maintenance (+0.5 percent); food & non-alcoholic beverages (+0.2 percent); housing, water, electricity, gas & other fuels (+0.1 percent); health (+).4 percent); education (+0.3 percent); restaurants & hotels (+0.2 percent); miscellaneous goods & services (+0.2 percent); recreation & culture (+0.1 percent) and communication (+0.0 percent). During January to June 2015, consumer prices rose 1.4 percent

Thursday July 09 2015 Malaysia Leaves Key Rate Steady  Bank Negara Malaysia | Joana Taborda | joana.taborda@tradingeconomics.com  Bank Negara Malaysia left its benchmark overnight policy rate on hold at 3.25 percent on July 9th, saying the economy is expected to expand at a moderate pace and noticing risks arising from the Greek crisis and uncertainties over the Asian economies. Statement by the Bank Negara Malaysia: The global economy continues to expand at a moderate pace. While growth across the advanced economies has improved, it has remained modest. In most of Asia, domestic demand continues to support growth despite weaker exports. Looking ahead, the recovery in global growth performance has, however, become vulnerable to increased downside risks. International financial markets have also become more volatile following increased concerns over developments in Europe and continued policy uncertainties in several major advanced countries.  There are also downside risks to growth in the major Asian economies. For Malaysia, the latest indicators point to continued expansion of the economy in the second quarter, albeit at a more moderate pace. Overall growth continues to be underpinned by domestic demand. Growth in private consumption is expected to be slower following the frontloading of consumption activity prior to the implementation of the Goods and Services Tax (GST) in the first quarter. While households are expected to continue adjusting to the GST in the immediate future, overall spending will be supported by continued wage growth and stable labour market conditions. Investment activity is projected to be driven by capital spending in the manufacturing and services sectors, as well as for infrastructure projects. These developments will contribute towards offsetting the weaker performance of the external sector. On balance, the prospects are for the Malaysian economy to remain on a steady growth path, with domestic demand being the key driver of growth. Headline inflation averaged at 2% in April and May. Going forward, headline inflation is expected to be higher following the impact of the GST and the recent adjustments to domestic fuel prices, before moderating towards the second half of 2016. Nevertheless, underlying inflation is expected to remain contained amid stable domestic demand conditions. While recent global and domestic developments have affected the ringgit exchange rate and domestic financial markets, there remains ample liquidity in the domestic financial system with continued orderly functioning of the financial and foreign exchange markets. The financial institutions are also operating with strong capital and liquidity buffers. Access to financing has continued with credit growth remaining at healthy levels. Financial intermediation has therefore continued to support the economy. At the current level of the OPR, the stance of monetary policy remains accommodative and supportive of economic activity. The MPC recognises that there are heightened risks to global growth and financial conditions.  These risks are being carefully monitored to assess their implications on macroeconomic stability and the prospects of the Malaysian economy. This is to ensure that the monetary policy stance is consistent with the sustainability of the overall growth prospects.

Friday July 03 2015 Malaysia Trade Surplus Narrows in May  Statistics Malaysia l Rida Husna l rida@tradingeconomics.com  Malaysia reported a MYR 5.51 billion trade surplus in May of 2015, slightly down from MYR 5.65 billion a year earlier and matching market consensus, as imports fell more than exports. Year-on-year, exports declined by 6.7 percent to MYR60.45 billion in May. Sales of all main commodities fell: LNG (-47.9 percent to MYR2.6 billion, accounting for 4.4 percent of total shipment); petroleum products (-28.3 percent to MYR3.80 billion, 6.3 percent share); crude petroleum (-22.1 percent to MYR2.3 billion, 3.8 percent share); palm oil and palm-based products (-7.3 percent to MYR5.3 billion, 8.8 percent share); natural rubber (-42.4 percent to MYR220.7 million, 0.4 percent share); electrical and electronics/E&E products (-0.6 percent to MYR21.1 billion, 34.9 percent share) and timber and timber-based products (-4.5 percent to MYR1.7 billion, 2.9 percent share).  Compared to the previous year, exports to Japan fell the most by MYR 2.0 billion, followed by Australia (MYR -1.1 billion), Taiwan (MYR -527.6 million), Indonesia (MYR-475.5 million) and the US (MYR-269.2 million).                    Imports decreased by 7.2 percent to MYR 53.49 billion, mainly due to a drop in purchases of intermediate goods and capital goods. Imports of intermediate goods, representing of 57.6 percent of total imports, fell by 8.4 percent  to MYR 31.7 billion, mainly due to industrial supplies, processed (MYR-1.5 billion, -11.1 percent) and fuel & lubricants, primary (MYR-1.2 billion, -41.7 percent). Purchases of capital goods, accounting for a 14.5 percent share, declined by 5.0 percent to 8.0 billion, due to a decrease in  capital goods (except transport equipment) (MYR-284.4 million, -4.1 percent) and transport equipment, industrial (MYR-131.4 million, -9.7 percent. In contrast, imports of consumption goods, accounting for 9.8 percent share, expanded by 27.2 percent to 5.4 billion, due to an increase of semi-durables (MYR747.5 million, +143.4 percent); food & beverages, processed, mainly for household consumption (MYR212.3 million, +17.9 percent) and non-durables (MYR18.8 million, +10.9 percent). Compared to the preceding year, imports from the EU countries Singapore declined the most by MYR 674.5 million, followed by Singapore (MYR-672.1 million), United Arab Emirates (MYR-RM659.5 million), the US (MYR-641.7 million) and Australia (MYR-585.9 million). In April 2015, Malaysia posted a  MYR 6.89 billion trade surplus.

Friday June 19 2015 Malaysia Inflation Rate at 5-Month High  Statistics Malaysia l Rida Husna l rida@tradingeconomics.com  Consumer prices in Malaysia rose 2.1 percent year-on-year in May of 2015, up from 1.8 percent in April and slightly above market consensus. It is the fastest inflation since December 2014, mainly due to an increase in cost of food & non-alcoholic beverages; housing and utilities and furnishing, household equipment and routine maintenance. Year-on-year, prices increased for: food & non-alcoholic beverages  (+3.5 percent in May from +3.1 percent in April); housing, water, electricity, gas & other fuels (+2.6 percent from +2.3 percent); furnishings, household equipment & routine maintenance (+2.6 percent from +2.3 percent); clothing and footwear (+0.9 percent from +0.7 percent); communication (+2.6 percent from +2.3 percent); recreation & culture (+1.6 percent from +1.5 percent); restaurants and hotels (+4.5 percent from +4.3 percent) and miscellaneous goods & services (+4.4 percent from +4.1 percent). In contrast, cost of transport declined by 4.7 percent, following a 4.8 percent drop in the preceding month.  While cost of education remained unchanged (+5.0 percent), prices moderated for alcoholic beverages & tobacco (+11.3 percent from +13.0 percent) and education (+2.5 percent from +2.6 percent). Among food & non-alcoholic beverages, customers had to pay more for: food at home (+3.4 percent in May from +2.7 percent in April), meat (+3.4 percent from +2.8 percent); fish & seafood (+3.5 percent from +2.3 percent); oils & fats (+0.7 percent from +0.6 percent); fruits (+2.7 percent from +1.5 percent); vegetables (+5.3 percent from +2.3 percent); sugar, jam, honey, chocolate & confectionery (+2.1 percent from +2.0 percent) and coffee, tea & non-alcoholic beverages (+3.5 percent from +2.3 percent). While prices moderated for milk & eggs (+5.9 percent from +7.1 percent), cost remained unchanged for rice, bread & other cereals (+1.9 percent); food products (+4.7 percent) and food away from home (+3.7 percent). On a monthly basis, consumer prices accelerated 0.4 percent, slowing from 0.9 percent rise in the preceding month. Price increases were reported for most categories except alcoholic beverages & tobacco and education. Food & non-alcoholic beverages Alcoholic beverages rose to 0.4 percent in May, followed by clothing and footwear (+0.1 percent); housing, water, electricity, gas & other fuels (+0.7 percent);  furnishing, household equipment & routine maintenance (+0.4 percent); health (+0.3 percent); transport (+0.2 percent); communication (+0.1 percent); recreation & services (+0.2 percent); restaurants and hotels (+0.4 percent) and miscellaneous goods & services (+0.3 percent). In contrast, cost of alcoholic beverages & tobacco declined by 1.5 percent and prices of education dropped by 0.1 percent. '

Friday June 05 2015 Malaysia Trade Surplus Narrows in April  Statistics Malaysia l Rida Husna l rida@tradingeconomics.com  Malaysia reported a MYR 6.89 billion trade surplus in April of 2015, significantly down from MYR 8.74 billion a year earlier but still above market forecasts, as exports unexpectedly fell more than imports. Year-on-year, exports declined by 8.8 percent to MYR 60.38 billion in April. The main commodities which contributed to the decline were: refined petroleum products (-48.2 percent to MYR2.7 billion, accounting for 4.5 percent of total exports); LNG (-40.1 percent to MYR3.2 billion, 5.3 percent share); crude petroleum (-43.7 percent to MYR1.9 billion, 3.2 percent share), palm oil and palm-based products (-16.1 percent to MYR4.6 billion, 7.6 percent share), E&E products (-3.0 percent to MYR21.0 billion, 34.8 percent share) and natural rubber (-38.3 percent to MYR268.9 million, 0.4 percent share). In contrast, sales increased only for timber and timber-based products (+0.3 percent to MYR1.8 billion, 3.0 percent share). Compared to the previous year, exports to Japan fell the most by MYR 1.8 billion, followed by Singapore (MYR -1.3 billion), Singapore (MYR -1.4 billion), Hong Kong (MYR -727.1 million), Taiwan (MYR-445.0 million) and Philippines (MYR-420.6 million).  Imports decreased by 7.0 percent to MYR 53.49 billion, mainly due to a drop in purchases of intermediate goods and capital goods. Imports of intermediate goods, representing of 59.5 percent of total imports, fell by 3.0 percent  to MYR 31.8 billion, mainly due to industrial supplies, processed (MYR-1.3 billion, -10.1 percent) and fuel & lubricants, primary (MYR-1.2 billion, -41.5 percent). Purchases of capital goods, accounting for a 13.1 percent share, declined by 16.0 percent to 7.0 billion, due to a decrease in  transport equipment, industrial (MYR-968.7 million,-71.2 percent) and capital goods (except transport equipment) (MYR-360.6 million, -5.2 percent). In contrast, imports of consumption goods, accounting for 9.1 percent share, expanded by 16.0 percent to 7.0 billion, due to an increase of semi-durables (MYR292.0 million, +42.0 percent); food & beverages, processed, mainly for household consumption (MYR104.9 million, +8.7 percent) and non-durables (+MYR90.0 million, +8.3 percent). Compared to the preceding year, imports from Singapore declined the most by MYR 1.1 billion, followed by South Korea (MYR-930.5 million), the EU countries (MYR-872.7 million), Australia (MYR-726.2 million) and Russia (MYR-508.4 million). In March 2015, Malaysia posted a  MYR 7.822 billion trade surplus.

Friday May 22 2015 Malaysia Inflation Rate at 4-Month High  Statistics Malaysia l Rida Husna l rida@tradingeconomics.com  Consumer prices in Malaysia rose 1.8 percent year-on-year in April of 2015, up from 0.9 percent in March but slightly below market forecasts. It is the fastest inflation since January this year, mainly due to an increase in cost of alcoholic beverages & tobacco, food & non-alcoholic beverages, health and restaurants & hotels. Year-on-year, prices increased the most for alcoholic beverages & tobacco (+13.0 percent in April from 10.6 percent in March), followed by food & non-alcoholic beverages (+3.1 percent from +2.3 percent); clothing and footwear (+0.7 percent from -0.2 percent); housing, water, electricity, gas & other fuels (+2.3 percent from +1.9 percent); furnishings, household equipment & routine maintenance (+2.3 percent from +0.2 percent), health (+5.0 percent from +3.6 percent); communication (+2.3 percent from -0.9 percent); recreation & culture (+1.5 percent from +0.6 percent); education (+2.6 percent from +2.2 percent); restaurants and hotels (+4.3 percent from +2.8 percent) and miscellaneous goods & services (+4.1 percent from +1.5 percent). In contrast, cost of transport declined by 4.8 percent, following from a 4.9 percent drop in the preceding month. Among food & non-alcoholic beverages, customers had to pay more for all categories except fish & seafood and fruits. Food at home increased by 2.7 percent in April (from +2.0 percent in March), followed by rice, bread & other cereals (+1.9 percent from 1.0 percent); meat (+2.8 percent from 1.0 percent); milk & eggs (+7.1 percent from +5.8 percent); oils & fats (+0.6 percent from +0.1 percent); vegetables (+2.3 percent from +1.2 percent); sugar, jam, honey, chocolate & confectionery (+2.0 percent from +0.8 percent); food away from home (+3.7 percent) and coffee, tea & non-alcoholic beverages (+2.3 percent from +0.6 percent). Meanwhile, prices moderated for fish & seafood (+2.3 percent from +2.4 percent) and fruits (+1.5 percent from +1.8 percent). On a monthly basis, consumer prices increased by 0.9 percent, the same pace as in the preceding month. Price increases were reported for all categories except furnishing, hoisehold equipment & routine maintenance. Alcoholic beverages & tobacco  rose to 2.2 percent in April, followed by clothing and footwear (+0.8 percent); housing, water, electricity, gas & other fuels (+0.4 percent);  health (+1.9 percent); transport (+0.3 percent); communication (+3.1 percent); recreation & services (+0.9 percent); education (+0.6 percent); restaurants and hotels (+0.5 percent) and miscellaneous goods & services (+2.5 percent). In contrast, cost of furnishing, hoisehold equipment & routine maintenance declined by 0.3 percent.

Friday May 15 2015 Malaysia GDP Growth Above Forecasts  Bank Negara Malaysia | Rida Husna | rida@tradingeconomics.com  The Malaysian economy advanced 5.6 percent year-on-year in the first quarter of 2015, moderating from a revised 5.7 percent expansion in the previous period but better than market expectations. The private sector remained the key driver of growth while exports contracted. On the expenditure side, private consumption advanced 8.8 percent year-on-year, accelerating from a 7.6 percent growth in the last quarter of 2014. The robust expansion was mainly supported by stable labor market conditions and higher wage growth and the flood relief efforts early in the year. The front-loading of household spending prior to the implementation of the Goods and Services Tax (GST) also contributed to the growth.Public consumption expanded by 4.1 percent, advancing from a 2.5 growth in the preceding quarter, due to higher growth in supplies and services amid moderate growth in emoluments.    Private investment grew by 11.7 percent, up from 11.1 percent in the December quarter. Public investment grew by 0.5 percent, rebounding from a 1.9 percent contraction in the previous period, mainly due to higher capital spending by the Federal Government.   Exports declined by 0.6 percent, slowing from 1.9 percent growth in the preceding quarter, due to sluggish in exports of services and moderation in exports of goods. Imports increased by 1.0 percent from a 2.6 percent rise in October to December, following a moderation in both imports of goods and services.   On the production side, the services sector recorded a steady growth of 6.4 percent, underpinned by growth in all sub-sectors, particularly consumption-related sub-sectors. The manufacturing sector rose 5.6  percent year-on-year, from a 5.4 percent expansion in the previous quarter, mainly driven by stronger performance in the exports-oriented industries, particularly the electronics and electrical (E&E) cluster. The construction sector was supported mainly by the non-residential and residential sub-sectors. The mining and quarrying sector grew by 9.6 percent, mainly due to higher crude oil production. Meanwhile, the agriculture sector contracted as a result of lower palm oil production, arising from flood-related disruptions.   Moving forward, Malaysia's GDP is expected to remain on a steady growth path with domestic demand remaining as the key driver of growth amid falling oil prices. Investment is projected to remain resilient with continued capital spending by both the private and public sectors. While private consumption is expected to moderate as households adjust to the introduction of GST, the steady rise of income and stable labor market would support household spending.   On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.2 percent, slowing from a revised 1.8 percent expansion in the previous three months.

Thursday May 07 2015 Malaysia Monetary Policy Unchanged in May  Bank Negara Malaysia | Joana Ferreira | joana.ferreira@tradingeconomics.com  Malaysia’s central bank left the overnight policy rate on hold at 3.25 percent on May 7th, citing uncertainty over growth and inflation. Domestic demand is expected to moderate, as private consumption may fall due to domestic factors. Statement by the Bank Negara Malaysia: The global economic expansion remains moderate, with divergent growth momentum across economies in the first quarter of 2015. While there have been improvements in the advanced economies, the pace of recovery has continued at a modest and uneven pace. For the emerging economies, while growth is slower, the economies continue to be the key contributor to global growth. In most of Asia, growth has been sustained by the continued expansion in domestic demand. Going forward, global economic growth is expected to improve although at a moderate pace. Downside risks to this outlook, however, continue to persist. In this environment, the international financial markets will continue to be affected by shifts in global liquidity and investors sentiments. For Malaysia, latest indicators suggest that domestic demand has continued to support growth in the first quarter. Looking ahead, the prospects are for the Malaysian economy to remain on a steady growth path, with domestic demand remaining as the key driver of growth. Although private consumption is expected to moderate as households adjust to the introduction of the Goods and Services Tax (GST), consumption expenditure will be supported by the steady rise in incomes and employment. Investment activity is expected to be led by capital spending in the export-oriented industries, the services sector and for infrastructure projects. These investments will cushion the impact of the lower oil and gas-related investment activity. On the external front, while export growth will be affected by lower commodity prices, manufactured exports will continue to benefit from the improvement in economic activity in several advanced economies and the sustained growth in Asia. Headline inflation averaged at 0.7% in the first quarter of 2015 due to lower domestic fuel prices. For the rest of the year, headline inflation is expected to trend higher given the impact of the implementation of the GST. This is expected to be partially offset by the overall lower global commodity and energy prices. Underlying inflation is expected to remain contained amid the stable domestic demand conditions. At the current level of the OPR, the stance of monetary policy remains accommodative and supportive of economic activity. The MPC will continue to carefully assess external and domestic developments and their implications on the risks to inflation and the Malaysian economy. While the risks of destabilising financial imbalances are contained, the MPC will continue to monitor these risks to ensure the sustainability of the overall growth prospects.

Thursday May 07 2015 Malaysia Trade Surplus Above Forecasts in March  Statistics Malaysia l Rida Husna l rida@tradingeconomics.com  Malaysia reported a MYR 7.82 billion trade surplus in March of 2015, narrowing from MYR 9.52 billion a year earlier but beating market forecasts, as imports grew more than double than exports. Year-on-year, exports rose by 2.3 percent to MYR 66.50 billion in March.The main contributors to the increase were electrical & electronics /E&E (+14.6 percent to MYR 24.0 billion) and timber & timber-based products (+2.3 percent) to MYR 1.8 billion. In contrast, sales decreased for: refined petroleum products (-39.7 percent to MYR 3,4 billion); crude petroleum (-28.6 percent to MYR 1.9 billion); palm oil and palm-based products (-10.9 percent to MYR 4.8 billion); natural rubber (-33.3 percent) and LNG (-0.6 percent to MYR 5.4 billion). Compared to the previous month, exports to China rose the most by MYR 2.5 billion, followed by Hong KOng (MYR 1.3 billion), Singapore (MYR 1.2 billion), the US (MYR 1.2 billion) and the EU countries (MYR 892.6 million). Imports increased by 5.8 percent to MYR 58.60 billion, as purchases of  all goods rose. Imports of intermediate goods grew by 6.7 percent  to MYR 34.5 billion, mainly due to fuel & lubricants, processed, other (+39.1 percent; indutrial supplies, processed (+5.6 percent); food & beverages for industries (+77.9 percent) and industrial supplies (+35.7 percent). Purchases of capital goods increased by 15.6 percent to MYR 9.6 billion and those of consumption goods grew by 0.4 percent to MYR 4.4 billion. Compared to the preceding month,  imports from Singapore rose the most by MYR 2.1 billion, followed by the US (MYR 1.6 billion), Indonesia (MYR 1.0 billion), Thailand (MYR 910.5 million) and South Korea (MYR 828.3 million). In February 2015, Malaysia posted a  MYR 4.52 billion trade surplus, the lowest since October 2014.

Wednesday April 22 2015 Malaysia Inflation Accelerates in March  Statistics Malaysia l Rida Husna l rida@tradingeconomics.com  Consumer prices in Malaysia increased by 0.9 percent in March from 0.1 percent rise in the previous month, as a decline in cost of transport and clothing and footwear slowed while cost of furnishing, household equipment & routine maintenance and health increased. Year-on-year, price increases were reported for furnishings, household equipment & routine maintenance (+0.2 percent in March from +0.1 percent in February) and health (+3.6 percent from +3.4 percent). In contrast, prices declined for transport (-4.9 percent from -11.8 percent) and clothing and footwear (-0.2 percent from -0.6 percent). Price moderated for food & non-alcoholic beverages (+2.3 percent from +2.7 percent), housing, water, electricity, gas & other fuels (+1.9 percent from +2.4 percent), recreation services & culture (+0.6 percent from +0.8 percent), restaurants & hotels (+2.8 percent from +2.9 percent) and miscellaneous goods & services (+1.5 percent from +1.6 percent). Cost remained unchanged for alcoholic beverages & tobacco (+10.6 percent),  communication (-0.9 percent) and education (+2.2 percent). Among food & non-alcoholic beverages, customers had to pay more for: meats (+1.0 percent from -0.8 percent), food products (+2.6 percent from+2.4 percent) and coffee, tea & non-alcoholic beverages (+0.6 percent from +0.4 percent). Prices slowed for food at home (+2.0 percent from +2.4 percent), fish & seafood (+2.4 percent from +3.8 percent); milk &eggs (+5.8 percent from +6.6 percent), oils & fats (+0.1 percent from +0.2 percent), fruits (+1.8 percent from +3.1 percent), vegetables (+1.2 percent from +3.4 percent) and food away from home (+3.2 percent from +3.5 percent). Prices of rice, bread & other cereals remained steady at 1.0 percent. On a monthly basis, consumer prices increased by 0.9 percent, following a  0.6 percent rise in February. Price increases were reported for: transport (+8.0 percent); clothing & footwear (+0.4 percent); health (+0.4 percent); reataurants & hotels (+0.3 percent); miscellaneous goods & services (+0.3 percent), furnishings, household equipment & routine maintenance (+0.1 percent) and education (+0.1 percent). In contrast, prices declined for housing, water, electricity, gas & other fuels (-0.3 percent); food & non-alcoholic beverages (-0.3 percent) and recreation services & culture (-0.2 percent). Prices remained unchanged for alcoholic beverages & tobacco and communication. During January to March 2015, consumer prices recorded at 0.7 percent.