The Leading Index, which provides an early signal of the direction that the economy is heading, fell by a larger magnitude of 0.6% mom in January, compared with -0.3% in December. This was on account of sharper declines in Bursa Malaysia Industrial index (-0.2%) and the number of housing permits approved (-0.7%) as well as a slowdown in trade with eight major trading partners (+0.1%) and ratio of price to nit labour cost in the manufacturing sector (+0.2%). These were, however, mitigated by a smaller decline in money supply and a pickup in industrial material price index and CPI for services. The number of new companies registered, on the other hand, stagnated during the month after an increase in the previous month. As a result, the leading index’s sixmonth smoothed growth rate moderated to 7.7% in January, from +10.6% in December (see Chart 1). This was the second straight month of easing after reaching a peak in November, indicating that the economy will likely grow at a more moderate pace in 2H 2010.
Economic Highlights : Leading Index Eased In January, Points To A More Moderate Economic Growth In 2H 2010 ...
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