MIER unveils economic progress, cost of living indices

KUALA LUMPUR: The Malaysian Institute of Economic Research (MIER) launched its Genuine Prosperity Index (GPI) and the Cost of Living Indicator (CLI) on Monday, which is expected to be published in the fourth quarter of the year.

MIER said the GPI, which is more popularly known as the Genuine Progress Indicator, is meant to measure economic welfare of a country by economic progress, social wellbeing and environmental impact.

“The gross domestic product (GDP) is a very useful measure of economic size and growth but it was not designed to measure true progress, wellbeing or prosperity,” it said.

MIER said that the GDP does not separate costs from benefits and distinguish between welfare enhancing activities and harmful activities.

“In addition, it also emphasises national income average and ignores income distribution as well as pollution and depletion of natural resources,” it added.

The institute noted that the GPI was developed due to the need for a national measure on whether Malaysia is moving on the path of sustainability and prosperity beyond that which is conveyed by the GDP.

Based on historical data, MIER calculated that on a per capita basis, Malaysia’s GPI in 1990 is estimated at RM4,421, which increased to RM14,222 in 2016, representing an annual growth rate of 4.29%.

On the other hand, GDP figures for 2016 was RM35,000 with an annual growth rate of 2.98% over the same period.

“Sustainable welfare in Malaysia has grown even faster than per capita GDP. Nevertheless, if GDP was used as a proxy for welfare it has actually overestimated genuine welfare by as much as 146%,” it said.

Separately, MIER announced that it has undertaken a feasibility study and business, investment and financial planning for a national electric car company on behalf of a private investor.

“Our findings and business will be presented to the Prime Minister and it will be up to him to decide if this would be named as the third national car company,” said MIER chairman Tan Sri Kamal Salih.

He said that the group plans to proceed as a local electric car manufacturer even if it is not chosen as the third national car company and that the investor has earmarked RM5 billion for the venture.

Kamal said the electric car project is one of the seven high technology sector projects that would transform the Malaysian economy, as identified by MIER.

The other projects are solid state hydrogen, 5G national roll out, biojet fuel from palm oil, agrodome technology, hyperloop freight transport and gold equity plan.

On Monday, MIER signed a memorandum of understanding (MoU) with its strategic partner Elenvi Otomotif Sdn Bhd for a proposed development of a 400-acre manufacturing facility in Enstek Industrial Park, Negri Sembilan.

The institute also signed a number of MoUs relating to the seven high technology sectors it has identified.

source https://www.thesundaily.my/business/mier-unveils-economic-progress-cost-of-living-indices-YX1176652

PRG ventures into Thailand’s luxury fashion market

KUALA LUMPUR: PRG Holdings Bhd, through its 54.19 per cent-owned subsidiary Furniweb Holdings Ltd, has opened a Philipp Plein outlet in Bangkok, Thailand, marking its first venture into Thailand’s fashion apparel industry and the second such outlet in Southeast Asia.

In a statement today, PRG said the luxury fashion outlet was opened last Wednesday at the prestigious department store, Icon Siam Mall.

It followed the opening of a Philipp Plein flagship store in Singapore earlier this year.

Furniweb, which is listed on the Growth Enterprise Market board of the Hong Kong Stock Exchange, secured the distribution and retail rights in Thailand, Singapore and Malaysia from the Switzerland-based Philipp Plein group last year.

PRG said it is enthusiastic to capture new business opportunities in the fashion apparel business and believes the association with a famous global apparel brand will bring new elements and dimension to the group’s profile.

“The business venture will also potentially broaden the customer base for its existing core businesses and provide opportunities for growth,” it said.

PRG, a Bursa Malaysia Main Market-listed investment holding company, is mainly involved in the manufacturing, property development, construction, fashion apparel and healthcare businesses.

Furniweb entered into a letter of intent with Philipp Plein International AG (PPI) and Plein Sport AG (PS AG) in April last year with a view of starting a collaboration initially in Singapore, Malaysia and Thailand.

This included the appointment of Furniweb as the authorised dealer for the distribution, promotion and sale of luxury fashion apparel carried on under PPI’s trade name and/or lifestyle fashion apparel carried on under PS AG’s trade name in the three countries.

There are more than 200 Philipp Plein stores globally.

The high-end fashion label is named after its founder, German designer Philipp Plein, who is known as the “King of Bling”.

source https://www.thesundaily.my/business/prg-ventures-into-thailand-s-luxury-fashion-market-EX1176530

Upbeat consumer sentiment, while business sentiment remain stagnant says MIER

KUALA LUMPUR: Malaysian Institute of Economic Research (MIER) reported an improvement in its Consumer Sentiment Index (CSI) with 93 points for the second quarter of the year (2Q19) from 85.6 points recorded in the previous quarter.

According to MIER, the CSI score was bolstered by consumers’ assessment of their current financial situation, particularly their income and employment expectation in the near future.

“With job growth and household finances looking up but conservatively for the second half of the year, consumers need to exercise prudence amid the rising cost of living as buying can only depend on future income gains,” it said.

The institute highlighted that in the months ahead, household demand will proceed cautiously, particularly for interest sensitive and big ticket items such as houses and cars, while those that are planning such purchases are buoyed by interest rate cuts to consider making this long-term commitment.

Meanwhile, MIER’s Business Sentiment Index (BSI) for 2Q19 fell marginally to 94.2 points from 94.3 points in 1Q19. MIER noted that the CSI and BSI were well below the 100 points threshold, indicating optimism in the sector.

MIER said its BSI survey results indicate that businesses are not optimistic about their local sales performance in the next three months.

“Of the eight components, current and expected production, domestic and external orders increased slightly while current sales, capital investment, capacity utilisation and expected export sales came in weaker,” the institute said.

It said that Malaysian manufacturers are not putting high expectations in their business activities due to the global economic tensions and uncertainties.

“Overall, business confidence appears somewhat lower and almost flat in the second quarter,” it said, adding that the BSI suffered a loss of 22.1 points on an annual basis.

“This trend of an almost stagnating index is expected to continue into the third quarter of 2019. Components such as expected export sales are expected to decline while expected production will likely increase slightly,” it added.

MIER has also revised its gross domestic product (GDP) forecast for Malaysia this year to 4.6% from 4.5% previously, due to changes in its forecast model.

“Despite the revision, we are not optimistic due to global headwinds and weak sentiments,” said its chairman Tan Sri Kamal Salih (pix).

However, MIER associate fellow Dr Jamal Othman said that the US-China trade war may not necessarily result in GDP and welfare loss to Malaysia.

“Malaysia is poised to gain in both welfare and GDP albeit very marginally. There will be improvements in terms of trade, resource allocative efficiency and accumulation of capital stock,” said Jamal.

He surmised that export of some Malaysian goods may rise such as manufacturing, meat products, palm oil and others however, overall Malaysian imports may see larger increases leading to declining trade balance.

source https://www.thesundaily.my/business/upbeat-consumer-sentiment-while-business-sentiment-remain-stagnant-says-mier-HC1172768