RHB: Economic index points to stronger growth ahead
KUALA LUMPUR, April 24 —Malaysia may see an uptick in economic activities in the months ahead thanks to sustained global growth said RHB Research Institute following the release of February's leading economic indicators.
The research house said in a report today that the country’s leading index, which provides an early signal as to the direction of the economy, had increased by 2.9 per cent in February as compared with the same month last year, the fastest rate of increase in 13 months.
"This suggests that growth in economic activities will likely be sustained and may strengthen in the months ahead, given recent positive developments in the global economy and subsequently the recent performance of the Malaysian economy," said RHB.
The leading index had also increased by 1.2 per cent month-on-month in February, the highest since at least October last year.
RHB said that the US was showing more signs of a recovery with falling unemployment and higher retail sales.
It noted however that the Eurozone appeared to be in a technical recession with shrinking manufacturing and services activities.
In terms of Malaysia's lagging index however - which serves to confirm what has happened to the economy - the increase in February of only 0.1 per cent was less than that of January and December which were 0.3 and 0.2 per cent respectively.
RHB said that this was mainly due to a decline in the labour cost of manufacturing as well as a stagnation in the exports of gas and petroleum in February.
The number of approved investments also declined 0.1 per cent in February, which was the same rate of decline as in January.
RHB said that while the Malaysian economy is expected to pick up pace in the second half of the year, the overall rate of growth is expected to moderate to 4.5 per cent in 2012, from 5.1 per cent in 2011.