Malaysia Economic Forecast

Malaysia Economic Outlook

May 26, 2020

The economy expanded at the slowest pace in over a decade in the first quarter, as the country reeled from the Covid-19 fallout. Sharp contractions in exports and fixed investment prompted the deceleration, amid lower Chinese demand and capital outflows. Only resilient household spending growth and a jump in government consumption spared the economy a downturn in Q1. Turning to the second quarter, GDP is set to shrink as lockdown measures hammer consumption, while bleaker economic conditions abroad weigh on trade and investment. A record drop in the manufacturing PMI in April provided a glimpse of the scale of deterioration, as companies cut output at an unprecedented rate amid plummeting demand. In politics, on 18 May, Prime Minister Muhyiddin Yassin managed to postpone a confidence vote until, most likely, July, averting a political crisis amid dwindling parliamentary support for his administration.

Malaysia Economic Growth

The Covid-19 pandemic is set to push the economy into recession this year. Rising unemployment and containment measures will hammer private consumption, while the deteriorated sentiment should hinder fixed investment. Exports should shrink amid plummeting demand for oil and a drop in tourist arrivals. Political risks also cloud the outlook. FocusEconomics panelists see the economy contracting 2.6% in 2020, which is down 1.0 percentage points from last month’s forecast, before rebounding and growing 5.7% in 2021.

Malaysia Economy Data

2015 2016 2017 2018 2019
Population (million)31.231.632.032.432.8
GDP per capita (USD)9,7249,5789,94711,06811,091
GDP (USD bn)303303319358364
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)-3.2-3.1-3.0-3.7-  
Public Debt (% of GDP)53.651.950.151.2-  
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)64.367.368.762.463.6

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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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