(Bloomberg) — As Malaysians head to the polls on Nov. 19, rising costs of living and a weaker currency will likely influence how they cast their ballots.
Latest indicators show mixed results. Gross domestic product logged a region-beating double-digit growth in the third quarter and labor force has shown flashes of returning to pre-Covid levels, even as key sectors including palm oil and manufacturing continue to face worker shortages.
Here’s where the economy stands prior to the national vote.
Malaysia expanded at 14.2% in the July-September period, a blowout number even with a low base in a Covid-addled 2021. Sustained strong demand for services and manufactured goods is likely to keep the economy clear of a recession next year, a view echoed by Bank Negara Malaysia Governor Nor Shamsiah Mohd Yunus.
Still, the rapid, but uneven rebound from the pandemic may have bypassed some key electorate bases, as seen in the labor data.
Malaysia’s overall jobless rate returned to a near pre-pandemic level of 3.7% in September, with levels varying with ethnicity.
Malays, the largest ethnic group, trailed other blocs with an unemployment rate of 4.1%. In comparison, Indians had an unemployment rate of 2.8%, while ethnic Chinese posted the lowest jobless rate of all groups at 2.7%.
Peninsular Malaysia, home to the capital city of Kuala Lumpur and Penang, may be the pageant winner for economic performance, but the eastern states of Sabah and Sarawak that jointly account for a quarter of parliament seats hold the swing blocs key to forming the next government.
Sabah saw its jobless rate fall to 8.2% in the third quarter, but remains well behind its pre-Covid peak of 5.3%. Meanwhile, Sarawak had improved to a 3% jobless rate. Female unemployment reached its lowest in 10 quarters at the end of September at 3.9%, while that for male workers was at 3.6%. The rate of youth out of jobs was high at 10.8% in the 15 to 24 age group.
Like elsewhere, Malaysia’s 32.8 million people are struggling with rising costs of living as inflation has doubled from the start of the year despite food and fuel subsidies. Core inflation, which excludes volatile items like fresh foods, touched a seven-year high of 4% in September.
The cost for food reached a decade-high of 7.2% in August, with meat and dairy prices burning a hole in the pockets of consumers. Though Governor Shamsiah said that the overall inflation had likely peaked at 4.5% in the third quarter, voters expect the next government to retain price controls.
A weak ringgit has bloated Malaysia’s food-import bill, worsening price pressures in a nation that relies on overseas purchases to meet more than half its food needs. The dollar strengthened against the nation’s currency in 2022, rising to 4.5925 from 4.1615 in the latest year-over-year reading. On the flip side, a weak ringgit, rising commodity prices and surging manufacturing sector boosted exports to a record 146 billion in June.
While imports have grown at a higher rate than exports through September in 2022, there’s little reason for alarm given the trade balance is in surplus.
Keeping in step with other central banks fighting inflation, Bank Negara Malaysia hiked borrowing costs for four straight sessions this year. Bloomberg Economics expects another rate increase at BNM’s next meeting in January amid the continued increase in core inflation.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
