Malaysia Economic Forecast

Malaysia Economic Outlook

November 17, 2020

Following Q2’s record fall in GDP, activity contracted at a much softer pace in Q3 as Covid-19 restrictions were eased in early June. Exports shrank at a milder pace thanks to increased foreign demand, mainly for electronics, while domestic demand contracted less steeply, with consumer and capital spending both falling at a softer rate. Turning to Q4, incoming data suggests that the recovery might be losing steam. The manufacturing PMI slid further into contractionary territory in October, reflecting moderating growth in new orders and output. This, coupled with the reinstatement of targeted lockdowns in October, bodes ill for private activity. Lastly, on 6 November, the government presented its draft 2021 budget of MYR 322.5 billion (about USD 78 billion)—the largest in the country’s history—based on a 6.5%–7.5% GDP growth rate and a lower fiscal deficit of 5.4% of GDP.

Malaysia Economic Growth

The economy is seen contracting sharply this year, before bouncing back in 2021 on the back of firming consumer spending, stronger construction activity and rebounding exports, as demand from key trading partners recovers. That said, the uncertain course of the pandemic clouds the outlook. FocusEconomics panelists see the economy growing 6.6% in 2021, which is unchanged from last month’s forecast. In 2022, the panel sees the economy expanding 4.6%.

Malaysia Economy Data

2015 2016 2017 2018 2019
Population (million)31.231.632.032.432.8
GDP per capita (USD)9,7249,5789,95211,07211,091
GDP (USD bn)303303319359364
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
Unemployment Rate3.
Fiscal Balance (% of GDP)-3.2-3.1-2.9-3.7-3.4
Public Debt (% of GDP)53.651.950.151.252.5
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)-7.5-1.16.7-1.1-1.4
Policy Interest Rate (%)
Stock Market (annual variation in %)-1.3-
Exchange Rate (vs USD)4.294.494.054.134.09
Exchange Rate (vs USD, aop)3.914.144.304.044.14
Current Account (% of GDP)
Current Account Balance (USD bn)
Trade Balance (USD billion)
Exports (USD billion)199190218249238
Imports (USD billion)176168195218205
Exports (annual variation in %)-14.9-4.914.814.3-4.2
Imports (annual variation in %)-15.7-4.415.612.0-5.9
International Reserves (USD)95.394.5102101104
External Debt (% of GDP)64.367.368.662.363.5

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Malaysia Facts

Value Change Date
Bond Yield3.320.15 %Dec 31
Exchange Rate4.090.0 %Jan 01

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