Monday, May 24, 2010

20100524 1405 Malaysian Economic News.

The Consumer Price Index (CPI) for April was higher by 1.5% yoy (1.3% in Mar). On a month-on-month basis, the main groups showed increases except those of clothing and footwear (-0.3%), and communication (-0.3%). For the January-April period, the CPI rose 1.3%. (Bernama) Please see our Economic Update for further details

The Cabinet is to meet this week to discuss politically unpopular changes to its subsidy regime for petrol, natural gas, food and road tolls. Subsidies alone chewed up RM24.5bn in 2009, 15.3% of the total operating spending, pushing Malaysia’s budget deficit to a more than 20-year high of 7.0% of GDP. There are three options the Government may consider: (i) complete withdrawal of subsidies in one go, (ii) a gradual approach, and (iii) just make minor changes or do nothing. (StarBiz)

Bank Negara Malaysia's international reserves amounted to RM314.2bn (US$96.1bn) as at 14 May 10, from RM313.9bn (US$96.0bn) as at end-April. The reserves position is sufficient to finance 8.3 months of retained imports and is 4.4 times the short-term external debt. (BNM)

Malaysia and Chile wrapped up talks for a free trade agreement (FTA) in Santiago last Friday, paving way for a bilateral FTA to be signed before the year-end. International Trade and Industry Ministry secretary-general Tan Sri Rahman Mamat said it will allow 99% of Chilean exports to enter Malaysia without tariffs and 95% of Malaysian imports to Chile to be tariff-free. The final announcement would be made by the government later. (BT)

The government has agreed to partially finance the maintenance cost of public housing infrastructures in the Kuala Lumpur Federal Territory. DPM Tan Sri Muhyiddin Yassin said that the cabinet made the decision because it did not want the public housing areas to fall into further disrepair. Nonetheless, the government has a plan to resolve the traffic congestion problem in Kuala Lumpur with a mammoth long-term programme; he said but declined to divulge the details. (Bernama)

The Federal Agricultural Marketing Authority (Fama) has set a target of 1,000 farmers' markets nationwide under the 10th Malaysia Plan (10MP). Its director-general, Datuk Mohamed Shariff Abdul Aziz, said there were about 500 of these markets now, involving 17,800 agro-entrepreneurs and annual sales worth RM500m. (Bernama)

The Northern Corridor Economic Region (NCER) has received investments to the tune of RM1.4bn between Jun 08 and April this year. The chief executive of the Northern Corridor Implementation Authority (NCIA), Datuk Redza Rafiq said that currently, 28 various programmes were being implemented within the four states in NCER by NCIA. (Bernama)

The Ministry of International Trade and Industry (MITI) is expected to make several announcements on the development of entrepreneurs at national level, particularly Bumiputeras, following the Entrepreneurs Development Council (MPU) meeting on 25 May. Senior Director of the Entrepreneurs Development Division, MITI, Datuk Abdul Ghafar Musa said the announcements will be made by the Minister Datuk Seri Mustapa Mohamed after the meeting. (Bernama)

The government hopes to identify more rural areas in Sarawak for inclusion in its price controlled item programme. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Sabri Ismail Yaakob said essential daily items cost more in the rural areas due to the high transportation cost, causing the government had allocated RM96m as subsidy for the transportation cost nationwide since last year and to last for the whole of this year. For next year, a permanent budget has been considered and which does not require Cabinet approval. (Bernama)

The government will ensure that the levy on foreign workers will be reasonable and will not adversely affect the industries, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. At present, the annual levy rate for the manufacturing and construction sectors is RM1,200, plantation (RM540), agriculture (RM360), welfare home services (RM600) and other services except resorts and welfare homes (RM1,800). (Bernama)

Malaysians will have a chance to have a chance to have say in open day organized by the Government this Thursday (27 May) to gather feedback on the inevitable reduction in subsidies on items including sugar and petrol. The open day on subsidy rationalization will be held at the Kuala Lumpur Convention centre from 9am to 2pm. Recommendation from the Performance Management and Delivery Unit (Pemandu) subsidy rationalization lab will be publicly displayed during the open day. (Star)

Prime Minister, Datuk Seri Najib Tun Razak is set to unveil more measures to improve the country's standing. These include relaxing the requirements to grant PR status to former Malaysian citizens and foreign professionals to ensure a sufficient pool of skilled workers. The new initiatives will be released during the tabling of the 10th Malaysia Plan and the New Economic Model in Parliament early next month. (Star)

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