KUALA LUMPUR: Malaysia's economy is expected to face challenges in maintaining its recovery momentum amidst the continuous COVID-19 outbreak, said the Department of the Statistics (DOSM) today.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said it has been an uphill battle for Malaysia to curb the spread of the COVID-19 due to the onslaught of a more contagious variant which worsened the health crisis.

"To overcome this situation, the government has undertaken vigorous actions by speeding up the vaccination programme and introducing the National Recovery Plan," he said in a statement today.

Mohd Uzir noted that while key economic indicators for the first five months of 2021 showed encouraging performance, the Leading Index (LI), which anticipates the economic direction in the near future, posted a slower growth of 6.9 per cent in May 2021 versus 15.7 per cent in April 2021.

In line with the low base effect, Malaysia's trade surged year-on-year (y-o-y) by 48.7 per cent in May 2021, continuing the double-digit growth for four consecutive months.

Additionally, the Industrial Production Index also continued its double-digit growth momentum and recorded a 26.0 per cent y-o-y increase during the same month, he said.

In terms of prices, Malaysia's inflation rate in May 2021 surpassed 4.0 per cent for the second time this year, due to the continuous rise in the global food price index which hiked up food costs in Malaysia.

Meanwhile, the labour force expanded by 384,900 persons in May 2021, bringing the total to 16.10 million persons compared to 15.71 million in May 2020.

"The labour force participation rate rose by 0.5 percentage points y-o-y to 68.5 per cent, while the unemployment rate declined to 4.5 per cent from 5.3 per cent in May 2020," he added.

-- BERNAMA