Malaysia Economic Forecast

Malaysia Economic Outlook

October 19, 2021

Activity likely took a hit in Q3, weighed on by strict Covid-19 curbs. Industrial output tumbled in July–August, while export growth eased significantly in the same period as restrictions hampered semiconductor production, weighing on shipments of electrical and electronic goods in turn. Moreover, nosediving retail sales in July–August point to waning consumer spending. However, a jump in the vaccination rate in recent months—with around 65% of the population fully vaccinated by mid-October—has prompted the gradual relaxation of curbs, boding well for activity in Q4. In other news, on 27 September, the prime minister unveiled the country’s 12th five-year spending plan, aiming to spend MYR 400 billion (around USD 95.5 billion) on existing schemes and MYR 260 billion on new projects, while promoting sustainable growth. Meanwhile, the government is set to table its 2022 budget on 29 October.

Malaysia Economic Growth

Following 2021’s projected rebound, the economy is set to grow at a sharper pace next year. A high vaccination rate should result in the gradual removal of restrictions, while the government’s new approach to treating Covid-19 as endemic is likely to safeguard activity from future pandemic-related disruptions. Moreover, normalizing semiconductor output will buoy exports. FocusEconomics panelists see the economy growing 5.7% in 2022, which is up 0.1 percentage points from last month’s forecast. In 2023, the panel sees the economy expanding 4.9%.

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 %)5.14.45.84.84.3
Consumption (annual variation in %)6.05.96.98.07.6
Investment (annual variation in %)3.62.66.11.4-2.1
Industrial Production (annual variation in %)2.54.14.43.12.3
Unemployment Rate3.13.53.33.33.3
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 %)3.33.25.18.93.5
Inflation Rate (CPI, annual variation in %, eop)2.71.73.50.21.0
Inflation Rate (CPI, annual variation in %)2.12.13.81.00.7
Inflation (PPI, annual variation in %)-7.5-1.16.7-1.1-1.4
Policy Interest Rate (%)3.253.003.003.253.00
Stock Market (annual variation in %)-1.3-6.40.211.8-9.9
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)3.02.42.82.23.4
Current Account Balance (USD bn)9.17.28.98.012.3
Trade Balance (USD billion)23.221.223.030.733.2
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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