Leading index jumps to 17% in March | Free Malaysia Today - Free Malaysia Today

PETALING JAYA: Malaysia’s leading economic index, which provides a signal on the direction the economy is going, jumped significantly to 17.3% year-on-year in March, but the full impact of MCO 3.0 will only be known later, said economic affairs minister Mustapa Mohamed.

He said the Statistics Department has been told to do a quick study on the impact of MCO 3.0 on the economy, especially on SMEs.

“We hope the study can be done in 10 days for us to get an indication of the impact of MCO 3.0 on SMEs,” Mustapa told a press conference when announcing the economic index for March.

“When I met with petty traders, restaurants and other businesses, they were in support of the MCO (while the economy remained open),” he said.

Mustapa said the leading index was at 8% in January and February. It stood at 7.6% in December last year.

The lowest was in March and April 2020 with -3.8% and -6%, respectively, as all economic sectors were shut during MCO 1.0.

He said the improvement is due to an increase in manufacturing and export services.

Chief statistician Mohd Uzir Mahidin said other factors contributing to the rise in the leading index included the growth in the number of housing units approved, the performance of the Bursa index, real imports and the number of companies registered.

He said about 4,000 new companies were registered with the Companies Commission in March, indicating confidence in the economy.

“Despite uncertainties, an encouraging outlook is expected in the near future,” he said, due to positive sentiment in manufacturing, motor vehicle sales and higher commodity prices.

Asked to comment on the impact of the health crisis on the economy, Mustapa said the Covid-19 situation was “dynamic” and that the third wave of infections came as a surprise.

However, he said if the nation could flatten the curve during MCO 3.0, Malaysia could still achieve its earlier growth target of 6% to 7%.

“But it depends on the rate of vaccinations and the availability of vaccines. If the majority of Malaysians are vaccinated on schedule, it may improve the economy.

“It will also depend on the world economy.”

He said the economy of China and other countries is improving and, as a result, Malaysian exports are on the rise although the tourism industry remains the most affected.

Mustapa also said April’s leading index will be released in a week and the government expects the trend to remain positive due to the external front.

“Growth in the second quarter should be a lot better than last year. However, the situation is dynamic due to Covid,” he added.