Malaysia: Economic growth slumps to over decade low in Q1
GDP growth decelerated to 0.7% on an annual basis in the first quarter, down from the fourth quarter’s 3.6% year-on-year expansion and marking the slowest growth rate since Q3 2009.
Household spending growth fell to 6.7% in Q1, marking the worst result since Q1 2018 (Q4: +8.1% yoy). Public spending increased 5.0% in Q1 (Q4: +1.2% yoy). In addition, fixed investment slid 4.6% in Q1, compared to the 0.7% decrease logged in the previous quarter.
Exports of goods and services fell 7.1% on an annual basis in the first quarter, below the fourth quarter’s 3.4% contraction. Conversely, imports of goods and services declined at a sharper pace of 2.5% in Q1 (Q4 2019: -2.4% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic activity dropped 2.0% in Q1, contrasting Q4’s 0.6% growth.
The Covid-19 crisis is expected to push the economy into recession this year. Containment measures, rising unemployment and deteriorated sentiment will hamper domestic demand, while exports look set to shrink on muted global demand, fragile commodity prices, and diminished tourism. Political risks also cloud the outlook.