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CLICK TO ENLARGEWHILE key indicators show recovering momentum in Malaysia’s economy for the first five months of 2021, it has become increasingly challenging to sustain growth, given the prolonged Covid-19 pandemic.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin acknowledged that Malaysia currently faced an uphill battle to curb the spread of the Covid-19, as the public health crisis has worsened with the emergence of a more contagious variant.

He said the continued outbreak imposes challenges to the country’s economic growth.

“Malaysia’s economy is expected to face challenges in maintaining the recovery momentum. While the key economic indicators for the first five months of 2021 show encouraging performance, the Leading Index (LI) which anticipates the economic direction in the near future posted slower growth of 6.9 % in May 2021 against 15.7% in April 2021.

“In addition, the growth rate of the LI is moving downwards despite persistently being above the trend,” he noted

“To overcome this situation, the government has undertaken vigorous actions by speeding up the vaccination programme and introducing the National Recovery Plan,” he added.Amid a low-base effect, Malaysia’s trade surged 48.7% year-on-year (y-o-y) in May 2021, continuing its double-digit growth for four consecutive months.

Malaysia’s exports increased 47.3% y-o-y, driven by a rise in domestic exports and re-exports, while imports rose 50.3% y-o-y, outpacing export growth for the first time since April 2020. The trade balance remained in surplus of RM13.7bil, an increase of 32.3% y-o-y.

Similarly, the industrial production index in May 2021 continued its double-digit growth momentum and recorded a 26% y-o-y increase amid of low base effect a year ago.

Wholesale and retail trade recorded a positive growth of 28.3% y-o-y in May 2021, with a sales value of RM108.3bil. Inflation rate in May 2021 surpassed 4% y-oy for the second time this year, contributed by the continuous rise in the global food price index which hiked up food costs in Malaysia.