This article first appeared in The Edge Malaysia Weekly on February 12, 2024 - February 18, 2024
The beginning of the week will be relatively quiet on the business and economic front as Malaysians observe the Chinese New Year holiday. Bursa Malaysia will be closed on Monday and resume operations on Tuesday.
Market participants will be keeping an eye on Malaysia’s gross domestic product (GDP) data for the fourth quarter of 2023 (4Q2023), which will be unveiled on Friday.
Last Thursday, the Malaysian Institute of Economic Research (MIER) projected GDP would grow modestly at 3.6% for 4Q2023, leading to a full-year growth of 3.9% in 2023, despite weak external demand and the ringgit’s depreciation.
However, the economy is expected to expand moderately within the range of 4.3% to 4.6% in 2024, driven by resilient domestic demand and stable labour market conditions, according to MIER.
Earlier in January, the Department of Statistics Malaysia estimated a 3.4% year-on-year increase in GDP to RM411.35 billion in 4Q2023, below Bloomberg’s consensus’ forecast of 4.1%.
Across the Causeway, Singapore Deputy Prime Minister and Minister of Finance Lawrence Wong, who is set to be the city state’s next premier, will deliver the nation’s FY2024 Budget Statement in parliament on Friday. Economists will be looking for indications of any shift in government priorities. They anticipate the fiscal position will be expansionary, with DBS Bank pegging the overall fiscal deficit at 0.4% of GDP and UOB estimating a 1.2% deficit.
In addition, the economists expect the fiscal year ending March 31 to clock a modest surplus instead of the original shortfall of S$400 million (RM1.4 billion), or 0.1% of GDP, due to buoyant tax revenue. Singapore’s inflation has fallen from a peak of 5.5% early last year but remains higher than pre-pandemic levels of 3.3% in December.
The city state’s 5.9 million people are also dealing with a 1-percentage point hike in sales tax that started this year and an upcoming scheduled increase in water tariffs.
It will be a short week in China as financial markets will close from Feb 9 to 17 for the Lunar New Year holiday. But it is worth noting that the country is due to release its monthly loan prime rate fixings on Feb 20.
In the US, attention will be focused on several key data releases. These include the monthly US federal budget for January, to be released on Monday, followed by the Consumer Price Index and core CPI for January on Tuesday.
Michael Feroli, chief US economist at JP Morgan, pointed out that while US inflation has cooled significantly relative to earlier boomy highs from the past few years, it still remains above target.
“Weakening in core goods inflation has been an important moderating force for overall inflation, but core services prices excluding housing have cooled much less noticeably lately. Absent a recession next year, we don’t see inflation getting all the way back down to 2%.”
In addition, Thursday will see the release of January’s Import Price Index, US retail sales, industrial production, initial jobless claims and the Home Builder Confidence Index for February. On Friday the country will release the Producer Price Index and core PPI for February, along with preliminary consumer sentiment for February.
Meanwhile, the UK will also be releasing its CPI and core CPI for January on Wednesday, followed by GDP figures for December 2023 and 4Q2023 on Thursday.
On the local corporate front, Berjaya Food Bhd and SSF Home Group Bhd are scheduled to announce their latest quarterly earnings on Tuesday, followed by Mr DIY Group (M) Bhd, Hup Seng Industries Bhd, JF Technology Bhd and UOA Real Estate Investment Trust on Wednesday.
Thursday is expected to see earnings releases by MISC Bhd and Hume Cement Industries Bhd, while Petronas Gas Bhd, Supermax Corp Bhd, Kossan Rubber Industries Bhd, Malaysian Pacific Industries Bhd and KPJ Healthcare Bhd are set to report theirs on Friday.
In the courts, the resumption of jailed former prime minister Datuk Seri Najib Razak’s 1Malaysia Development Bhd-Tanore trial will continue from Tuesday to Thursday.
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