This article first appeared in The Edge Malaysia Weekly on May 13, 2024 - May 19, 2024

It will be an eventful week for economic observers both locally and globally, as Bank Negara Malaysia is set to announce growth figures in the first quarter of 2024 (1Q2024) on May 17, while the US Bureau of Labour Statistics will release the consumer price index (CPI) for April on May 15.

Across the Causeway, Singapore Prime Minister Lee Hsien Loong will serve his last day in office on May 15 and take on the role of Senior Minister in the new Cabinet. Deputy Prime Minister and Minister of Finance Lawrence Wong will succeed him.

Malaysia reported advanced gross domestic product (GDP) estimates of 3.9% in 1Q2024 from a year earlier, driven by growth in the services sector. The advanced estimates, if met, would mean that the Malaysian economy accelerated from the growth of 3% year-on-year in 4Q2023.

Bank Negara retained its overnight policy rate (OPR) at 3% during the Monetary Policy Committee meeting on May 9, stating that the global economy continues to expand amid a resilient labour market in some countries and continued recovery in global trade.

“Looking ahead, global growth is expected to be sustained, as headwinds from tight monetary policy and reduced fiscal support will be cushioned by positive labour market conditions and moderating inflation,” Bank Negara said when announcing the OPR.

Meanwhile, the US CPI will be monitored closely as attention remains centred on the Federal Open Market Committee (FOMC) and its wide-reaching influence on global interest rates, said S&P Global Market Intelligence. The April CPI is going to be the first of two inflation data releases before the next FOMC meeting on June 12.

“Early PMI [Purchasing Managers’ Index] data releases have hinted at US inflation slightly easing into the start of the second quarter of 2024, which, alongside recent indications of a slowdown in US hiring and wage growth, have helped to boost market sentiment.

“That said, official confirmation of the inflation trend via the CPI will still be key in bolstering confidence for the lowering of interest rates,” the research firm said in a May 10 note.

According to the nowcast model from the Cleveland Federal Reserve, April CPI should come in around 0.4% for headline inflation and 0.3% for core inflation — inflation data that does not include food and energy prices.

US activity data such as retail sales and industrial production numbers will also be released throughout the week.

“Early insights from PMI data showed US manufacturing production growth decelerated amid lower new business. That said, retail sales may well reflect the improvements in consumer sectors that were observed in the US sector PMI data,” said S&P Global.

China will announce its April CPI and Producer Price Index (PPI) on May 11. Bloomberg estimates a 0.2% y-o-y increase in China’s CPI, and an improving PPI of -2.3% y-o-y in April, compared with -2.8% y-o-y in March.

“The latest Chinese PMI surveys suggest that the deflationary pressure has continued into April. Despite higher input prices, the selling/output prices have stayed in contraction territory,” said UOB Global Economic & Markets Research in a May 10 note.

Other Chinese economic data that will be announced this week include April industrial production, retail sales and year-to-date property investment figures on May 17. UOB estimates China’s industrial production to accelerate to 5.4% y-o-y in April, from 4.5% in March, while its retail sales are expected to increase faster, at 3.8% y-o-y in April, from 3.1% in March.

However, the Singapore-based bank continues to see contractions in China’s property investments YTD, with the numbers in April estimated to come in at 9.6% lower than the same period last year. It was at -9.5% as at end-March.

“April data, including retail sales, industrial production and fixed asset investment, is expected to strengthen after disappointing in March. This will likely assure markets that the stabilisation of the economy remains on track.

“Having said that, home prices may continue to decline, as the downturn in China’s property market is still ongoing,” the UOB arm of global economic research said in the note.

India will also release its April CPI on May 13, followed by its wholesale prices on May 14. The largest country by population might see its trade deficit widen to US$17.2 billion in April, from US$15.6 billion in March, said UOB.

In Southeast Asia, Singapore will release its April non-oil domestic exports (NODX) data on May 17, with Bloomberg estimating a 10.8% month on month (m-o-m) expansion (seasonally adjusted, SA), compared with an 8.4% m-o-m contraction in March.

“We are slightly less optimistic, as we project NODX to expand 7.7% m-o-m SA in April, following two consecutive months of sequential decline, translating into a narrower -6.6% y-o-y contraction.

“The improvement in electronics PMI in April, especially in sub-indices such as new orders, new export orders and output, implies that underlying end-demand fundamentals remain intact,” said UOB.

Meanwhile, Bangko Sentral ng Pilipinas (BSP) will announce a monetary policy decision on May 16. In a Bloomberg survey as at May 10, all five economists expected BSP to keep the overnight reverse repurchase rate steady at 6.5%, while the standing overnight deposit facility rate is also expected to stay unchanged at 6%.

On the corporate side, a slew of companies are expected to announce their financial results for the quarter ended March 31, on May 17.

The list includes GuocoLand (Malaysia) Bhd (KL:GUOCO), Berjaya Assets Bhd (KL:BJASSET), S P Setia Bhd (KL:SPSETIA), Kobay Technology Bhd (KL:KOBAY), Perdana Petroleum Bhd (KL:PERDANA) and VSTECS Bhd (KL:VSTECS).

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