Malaysia Economic Outlook
November 17, 2020Following 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 GrowthThe 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
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|Bond Yield||3.32||0.15 %||Dec 31|
|Exchange Rate||4.09||0.0 %||Jan 01|
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Malaysia Economic News
July 23, 2021
Consumer prices 0.08% in June over the previous month, following May’s flat reading.
July 12, 2021
Industrial output growth moderated over the prior month, expanding 26.0% in annual terms in May (April: +50.1% yoy).
July 8, 2021
At its 8 July meeting, the Monetary Policy Committee of Bank Negara Malaysia (BNM) left the overnight policy rate unchanged at 1.75%, marking the sixth consecutive hold.
July 2, 2021
Merchandise exports skyrocketed 55.4% year-on-year in USD terms in May, but eased from April’s 71.4% jump.
July 1, 2021
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, plunged to 39.9 in June, well-below May’s 51.3, logging the lowest reading in 14 months.