This article first appeared in The Edge Malaysia Weekly on August 2, 2021 - August 8, 2021
Malaysia’s long-running political crisis deepened last week when the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah reprimanded the government for not heeding his advice and revoking the Emergency Ordinance (EO) without a debate in parliament.
The special sitting of parliament last Monday ended in chaos after the de facto law minister Datuk Seri Takiyuddin Hassan told the august house that the government had already revoked the EO. Opposition lawmakers objected as it had not been tabled and debated in parliament. Moreover, they questioned whether the revocation had received royal assent.
Two days later, Istana Negara issued a press statement stating that the Agong had not given his assent for the revocation of the EO, and that Takiyuddin had misled parliament. The Prime Minister’s Office later that day released a statement maintaining it had advised the Agong on the matter, and that the monarch must act according to the advice of the prime minister and the cabinet.
As opposition lawmakers have demanded that Prime Minister Tan Sri Muhyiddin Yassin and Takiyuddin step down following the royal rebuke, further developments are expected this week. The precarious political situation may hurt efforts to contain the spread of Covid-19, even as daily new cases continue to hover at a high of 17,000.
This week will be a packed one for economic watchers as the worldwide manufacturing and services Purchasing Managers’ Index (PMI) for the month of July will be released on Monday and Wednesday respectively. The indices will provide an insight into the health of the global economy.
“Flash PMI surveys revealed mixed trends in July, with Covid-19 once again playing a key role in divergences. While growth in the eurozone hit a 21-year high, Asia-Pacific economies, such as Australia and Japan, experienced contractions on the back of the spread of the Delta variant,” Chris Williamson and Jingyi Pan, economists at IHS Markit, say in a July 30 report.
“With various other APAC economies likewise affected by a resurgence of Covid-19 cases, the extent of the impact on economic conditions will be assessed on the release of the PMI data. Sector performance will also be of interest with the Delta wave’s disruption.”
The US’ non-farm payroll and unemployment data for July will be another indicator closely watched by observers of the global economy. The data will be released on Aug 6.
According to IHS Markit, consensus is currently pointing to strong non-farm payroll additions at over 900,000, up from the positive surprise of 850,000 in June. The US unemployment rate is expected to tick down further from the current 5.9%, while average hourly earnings are expected to increase at a steady rate of 0.3% on month.
In Europe, the Bank of England will convene this week. No changes are expected to the bank’s monetary policy decision, states IHS Markit in the report. However, the meeting minutes and monetary policy report will still be monitored by economic watchers for any changes to the monetary policy committee’s mixed views, with two members recently hinting at the need for tighter policy.
The eurozone will publish its producer price and retail sales data for the month of June on Aug 3 and 4 respectively. Meanwhile, Germany — Europe’s largest economy — will release its industrial orders and output data for June on Aug 4 and 5 respectively.
In Asia, Indonesia will release its inflation rate for July on Monday, followed by South Korea on Tuesday. Indonesia will also release its 2Q2021 GDP data on Aug 5, while Taiwan, Thailand and the Philippines will release their respective Consumer Price Index on the same day. On the home front, Bank Negara Malaysia will release its international reserves data as at July 30 on Aug 6.
Several Bursa Malaysia-listed companies will announce their quarterly results this week. On Aug 4, Fraser & Neave Holdings Bhd, Dufu Technology Corp Bhd and Hartalega Holdings Bhd are scheduled to release their financial results for the quarter ended June 30.
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