KUALA LUMPUR: The country's economy is feared to be getting even worse if there is no immediate and comprehensive solution to address the plunging Malaysia's Producers Price Index (PPI).
Perikatan Nasional chairman Tan Sri Muhyiddin Yassin said this is based on data that the PPI, which measures the prices of goods at the factory has recorded a decrease of 1.3 per cent in December 2023, as compared to a 1.5 per cent contraction in November 2023.
He said the negative flow reflects the plunging export revenue and the increasing cost of import, besides being mostly influenced by external market uncertainties.
"Although there is a slight recovery, the PPI is still hovering in the 'negative region'. This means that the external demand is at a very low point below the fundamental level.
"This is resulting in the affected domestic producers being forced to reduce the production of their respective products," he said in a statement today.
Muhyiddin, who is Parti Pribumi Bersatu Malaysia president said the situation may affect consumers and businesses that are already burdened by the spiralling costs of living.
As such, he urged the government to undertake immediate and unorthodox actions to help businesses to recover from the slump.
"The business community have not truly gotten out from the business recovery phase.
"Supposedly, at this phase, the government should have taken an immediate and unorthodox action to address the slump that they are facing to rejuvenate their businesses.
"However, that is not happening and in fact, they have to face more hurdles following the depreciation of the ringgit, plunging export, the spiralling cost of import material and weakening purchasing power among domestic consumers," he said.
Muhyiddin feared that the negative trend of the PPI would force producers to limit their production input such as working hours, raw material and the whole factory's chain.
This, he said, would further burden the people from the savings aspect as people will not be able to save as much as before due to their source of income being affected.
"Should this negative trend continue due to weak demand, producers may have to resort into trimming down their workforce.
"This will have a huge impact on the country's economy, in particular unemployment and the loss of individual income which may further aggravate the cost of living issue that is already pressuring the people.
"I am worried that in the situation where consumers are already burdened by all sort of hikes from food and daily necessities, to electricity tariff, a number of service taxes, school bus fares and medicines over the past year, this reality will further aggravate the country's economy," he said.
Muhyiddin, who is Pagoh member of parliament claimed the government was as being "lackadaisical" in handling handle the issue.
He said after being in power for a year, the unity government has no concrete action that could allay the people's concern.
"The negative trend of PPI is proof that the country's economy is deteriorating and unhealthy.
"If the government carries on with this style of leadership and economic management, I am worried that the Malaysia will fall into an even worse economic turmoil," he said.
On Tuesday, the Department of Statistics Malaysia (DoSM) announced that the PPI recorded a decrease of 1.3 per cent in December 2023 as compared to a 1.5 per cent contraction the previous month.
Chief Statistician Datuk Seri Mohd Uzir Mahidin attributed the downtrend to the mining sector, which fell by 3.4 per cent (November 2023: -4.7 per cent) due to the decline of both extraction of natural gas (-7.8 per cent) and extraction of crude petroleum (-1.9 per cent) indices.
He said the manufacturing sector continued to shrink by 1.5 per cent as against a 1.4 per cent decline a month before owing to the manufacture of coke and refined petroleum products (-12.3 per cent) and manufacture of food products (-4.2 per cent) indices.