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Malaysia's Economic Indicators: Overview and Near-Term Outlook (Q2 2007)

This presentation outlines Malaysia's key economic indicators for the second quarter of 2007, highlighting trends in GDP growth, domestic investment, export performance, and foreign direct investment (FDI). The report includes analysis of industrial production, inflation rates, and currency exchange, alongside insights from the MIER surveys. The data reflects Malaysia's external trade dynamics, productivity performance, and fiscal balance, providing a comprehensive snapshot of the economy's health and prospects for the near future.

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Malaysia's Economic Indicators: Overview and Near-Term Outlook (Q2 2007)

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  1. Economic Briefing 4 August 2007

  2. Presentation Outline Indicators of selected countries Malaysia’s key economic indicators MIER 2Q07 Surveys Near-term outlook

  3. GDP Growth (%)

  4. Domestic Investment (% of GDP)

  5. ExportGrowth (%)

  6. CAB as % of GDP

  7. FDI Inflows US$ billion

  8. Fiscal Balance (% of GDP)

  9. Foreign Reserves (US$ billion)

  10. Inflation Rate (%) 58.5% 20.5%

  11. Interest Rate (6m FD,%)

  12. Non-Performing Loans (3-months arrears)

  13. Unemployment Rate (%)

  14. Real Effective Exchange Rate (2000=100)

  15. % Change in Stock Indices as at 11th July’07, since Jan’07

  16. Debt Service Ratio (% of exports)

  17. Relative Productivity

  18. MALAYSIA’s KEY ECONOMIC INDICATORS • Leading index • External trade • Exports to major partners • Import sources • Industrial Production Index (IPI) • Foreign direct investments (BOP) • Monetary indicators • Inflation • Exchange rates • External reserves • Unemployment • Productivity performance • MIER survey trends

  19. Composite Indices & GDP Growth %change yoy

  20. Malaysia: Exports, Imports and Trade Balance

  21. Imports by Category

  22. Manufactured goods E&E Oil+LNG Palm oil External Trade • exports dominated mainly by manufactures, especially E&E • export structure remain unchanged but value-added have increased Source: DOSM

  23. USA Singapore EU Japan China Exports to Major Partners • traditional markets for Malaysia: US, Singapore, EU and Japan • Singapore, EU and Japan show declining market share • China account for an increasing share of Malaysia’s exports Source: DOSM

  24. Foreign Direct Investments • FDI (from BOP), although increasing, still far from pre-crisis levels • Malaysian investment abroad rising • portfolio flows remain volatile Source: DOS

  25. Total Approvals (LHS) USA (RHS) Japan UK Singapore China Foreign Approvals in Manufacturing • total of 571 projects approved in 2006, level of FDI approved highest to date • foreign investments amount >RM20 billion (43.9% of total) • Japan largest source of investments Source: MIDA

  26. Foreign Approvals by Country, Jan-May’07 Source: MIDA

  27. Foreign Approvals by Industry, Jan-May’07 Source: MIDA

  28. Malaysia: Industrial Production Index (IPI)

  29. Inflation Rate • inflation soften following peak of 4.8% in March’06 due to higher price of fuel • core inflation also trending generally lower Source: BNM

  30. Monetary Indicators • Moderate growth in M1, M2 and M3 Source: BNM

  31. RM vs. Major Currencies Source: BNM

  32. RM vs. Regional Currencies Source: BNM

  33. Current Account Balance current account surplus still sizeable, at 17.8% of GNP in 2006

  34. Foreign Reserves • international reserves at a sizable US$98.4 billion in June 2007 • equivalent to nearly 8.9 months of retained imports & 8.7 times the short-term external debt Source: BNM

  35. Unemployment Rate • employment rose an average of 3.3%pa with 1.6 million jobs created between 2001-2005 Source: DOSM

  36. Productivity Performance • favourable productivity growth thanks to continuous efforts to enhance productivity and high capacity utilisation in both domestic and export-oriented industries Source: NPC

  37. Malaysia: Total Loan and Deposit Growth

  38. Malaysia: Loans Approved & Disbursed

  39. Household Loans to GDP (%)

  40. Real Interest Rate (%) Inflation 3mFD

  41. NPLs/Total Loans Ratio& Capital Adequacy Ratio

  42. Malaysia: External Debt RM billion

  43. MIER 2Q07 INDICES

  44. The Business Conditions Index(BCI)

  45. Business Conditions Surveyon firmer footing points • BCI chalked an impressive 16.6 points to 122.1 • uptick in sales • pickup in output activities • higher local orders • turnaround in export orders

  46. BCI and Quarterly GDP Growth % GDP growth Quarter BCI GDP GDP y-o-y q-q 2Q07 122.1 1Q07 105.5 5.3 -1.9 4Q06 107.2 5.7 0.5 3Q06 107.8 6.0 3.9 2Q06 102.4 6.1 2.7 1Q06 102.5 6.0 -2.8 4Q05 100.5 5.2 1.8 3Q05 102.7 5.3 3.8 2Q05 106.0 4.1 2.4 1Q05 104.1 6.1 -2.9 BCI

  47. Productionshifting to higher gear % responded ‘better’ • 44% increased production, higher than 26% in 1Q07 • output of wood and wood-based products continue to accelerate (75% reported increase) • increases also observed in food and beverage, textiles and apparel, paper and paper products, chemicals and chemical products, non-metallic products, basic metal and metallic products

  48. Capacity Utilisationup a notch % responding positively • capacity utilisation averaged 80.4 from the previous reading of 79.6 • industries like paper and paper products, non-metallic products maintained capacity between 81-100% • chemicals and chemical products, rubber and rubber-based products also shifted to near-full capacity

  49. Capital Investmentgoing strong % responding positively • 28% reveal higher investments, edging up from 22% in 1Q07 • firms from food and beverage, textiles and apparel committed more funds for capital investment

  50. Inventoriessmooth flow • 19% reported fatter stockpiles, lower than 27% in previous quarter • stocks running lower for textiles and apparel and plastics and plastic products % responded ‘higher’ stocks

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