This article first appeared in The Edge Malaysia Weekly on August 8, 2022 - August 14, 2022
Malaysia’s economic data for the second quarter of the year will be announced on Friday. Bloomberg estimates have pencilled in a gross domestic product (GDP) growth of 5% year on year, the same as 1Q2022.
The Group of 20 countries, including the UK and Russia, are also due to release 2Q GDP figures this week; in Asia-Pacific, Singapore will release its numbers on Thursday.
The latest growth data will shed light on the economic performance of the countries amid geopolitical uncertainties and surging inflation. S&P Global Market Intelligence pointed to the worldwide Purchasing Managers’ Index (PMI), which shows a general slowdown in growth.
Its chief business economist Chris Williamson said in a report last Friday: “For the UK, output rose at a softer pace while business activity increased at a quicker rate in Russia. Singapore, meanwhile, registered a marked increase in output amid stronger client demand. Nevertheless, steep price pressures were once again evident.
“Besides ongoing inflationary pressures, July PMI data alluded to persisting supply constraints and difficulties in sourcing material inputs. China’s zero-Covid policy still poses some concern on the supply front.”
The Bank of Thailand (BoT) is scheduled to make a monetary policy decision on Wednesday. According to a Bloomberg survey, as at last Friday, 10 of the 11 analysts polled expect the BoT to hike rates by 25bps to 0.75% while only one analyst projects a more aggressive 50bps hike to 1%.
Trade data will also be in focus this week, with China releasing its July trade data on Aug 7. Economists surveyed by Bloomberg estimated that exports had increased by 14.6% y-o-y compared with an increase of 17.9% y-o-y in June, while imports rose by 4% y-o-y compared with just 1% in June.
After China, Taiwan will release its trade data on Monday. Economists estimate Taiwanese exports had increased by a slower pace of 11% y-o-y in July from 15.2% y-o-y in June, while imports could have surged 20.9% y-o-y last month compared with 19.2% y-o-y in June.
India is set to announce a number of figures. It will release its Consumer Price Index for July, June industrial production and July trade numbers between Aug 12 and 15.
Among the Group of Seven countries, the US will release its July inflation figures on Wednesday, with core inflation estimated to have risen 6.1% y-o-y — slightly faster than the 5.9% y-o-y increase in June.
The eurozone and the UK will release their respective June industrial production numbers on Friday. Economists surveyed by Bloomberg forecast industrial production in the eurozone had increased by only 0.8% y-o-y in June while the UK’s was projected to have increased by 1.3% y-o-y.
In US politics, the Inflation Reduction Act may be introduced in the Senate this week. The key elements of the Act include the creation of a 15% minimum corporate tax rate, prescription drug price reform, Internal Revenue Service tax enforcement, closure of the carried interest loophole, Affordable Care Act subsidy extension and energy security and climate change investments.
“The Inflation Reduction Act, while it is a reduced version of the Build Back Better bill, nonetheless represents the biggest climate deal for the Biden administration, with significant investments into US social safety nets,” says UOB Global Economics and Market Research economist Alvin Liew.
The next step for the bill is for its passage under reconciliation, which needs only majority vote in Senate to pass. This means all 48 Democrats must vote in favour, assuming no Republican support. It remains unclear when the Inflation Reduction Act will become law.
A slew of Malaysian corporate results will be announced this week. Greatech Technology Bhd is expected to release its financial results for the quarter ended June 30 on Thursday; MISC Bhd, Malaysian Bulk Carriers Bhd, PIE Industrial Bhd and Pentamaster Corp Bhd are expected to release their respective results on Aug 13.
At the courts, the graft trial involving former Penang chief minister and finance minister Lim Guan Eng will continue at the Kuala Lumpur Sessions Court before judge Azura Alwi on Monday. The corruption trial of Datuk Seri Dr Ahmad Zahid Hamidi in relation to the Foreign Visa System (VLN) is expected to resume at the Kuala Lumpur High Court on Wednesday.
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