Chief Statistician Uzir Mahidin said the contraction was due to the base effect and lower prices of primary commodities, particularly in the agriculture, forestry and fishing, and mining sectors.

“The agriculture, forestry and fishing index decreased 26.1% (January 2023: -20.9%) with fresh fruit bunch prices recording a 40.5% decline in February.

“At the same time, the mining index slipped 6.5% (January 2023: -2.2%) mainly due to a 16.1% drop in the extraction of crude petroleum index,” he said in a monthly report today.

Meanwhile, Uzir said the manufacturing index grew 3% in February versus the previous month’s 4.5% growth, attributable to the rise of the manufacture of computer, electronic and optical products index (8.5%).

He said that for the utility sector, the water supply index rose 3.7% and the electricity and gas supply index inched up 1%.

“On a monthly basis, the PPI for local production decreased 0.2% in February compared to a 0.8% contraction in the previous month,” he said.

Commenting on the PPI by stage of processing, Uzir said the index of crude materials for further processing continued to slide 16.9% in February, (January 2023: -12.4%) due to a 20.3% decline in non-food materials.

On producer-level inflation in selected countries, he said most of them displayed modest price increases in February due to energy prices, fuel and foreign currency exchange factors.

Additionally, he said, international palm oil prices continued to drop due to the lingering sluggish global import demand, despite seasonally lower production from major growing regions in Southeast Asia.

“Having said that, as one of the main exporters, Malaysia’s palm oil price further sank due to low demand and lower gas oil prices,” he said.