Malaysia's leading index rises 0.6pct in March, signalling continued growth
KUALA LUMPUR: Malaysia's economy is expected to maintain its growth trajectory, albeit at a more moderate pace, supported by solid economic fundamentals, said MIDF Amanah Investment Bank Bhd.
The leading index (LI), a key predictor of the country's economic trajectory, rose by 0.6 per cent year-on-year (y-o-y) to 112.5 points in March 2025, up from 111.9 a year earlier (as compared to February 2025: +0.1 per cent y-o-y).
In a note today, the investment bank said that while a favourable trade outcome with the United States could help alleviate some trade-related challenges, the external environment remains uncertain.
"Given this, domestic economic growth is expected to remain the key driver of Malaysia's economy, moving forward.
"The smoothed long-term trend shows that the LI in March 2025 remains below 100.0 points," it said.
MIDF said that this improvement was mainly driven by the double-digit expansions in the number of housing units approved (+27.8 per cent y-o-y) and the real imports of semiconductors (+22.3 per cent y-o-y).
However, it said that on a monthly basis, the LI was unchanged during the month (-0.04 per cent month-on-month (m-o-m); February 2025: -0.02 per cent m-o-m), marking the second consecutive month of relatively flat performance.
"The ongoing subdued and stagnant performance was attributable to the decline in the Bursa Malaysia Industrial Index (-0.2 per cent m-o-m; February 2025: -0.1 per cent m-o-m) and real imports of semiconductors (-0.2 per cent m-o-m; January 2025: +0.3 per cent m-o-m)," it said.
Nonetheless, the investment bank said the coincident index (CI), which reflects current economic performance, posted slower growth of +1.4 per cent y-o-y (February 2025: +1.9 per cent y-o-y), reaching 126.8 points (March 2024: 125.1 points).
"The sustained growth was underpinned by broad-based gains across all components of the CI, except for the real contributions to the Employees Provident Fund.
"On a monthly basis, the CI fell by -0.2 per cent m-o-m during the month (February 2025: +1.8 per cent m-o-m), returning to negative territory as seen in January 2025.
"The decline is mainly due to contraction in capacity utilisation in manufacturing (-0.3 per cent m-o-m; February 2025: +2.3 per cent m-o-m).
"Both total employment and real salaries and wages in the manufacturing sector recorded a marginal decline of -0.1 per cent m-o-m, following a flat reading in the previous month," it added.
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