Malaysia: Economy rebounds in the final quarter of 2021
February 11, 2022
The economy bounced back in the final stretch of 2021, expanding 3.6% year-on-year in the fourth quarter, above the 4.5% contraction logged in the third quarter. For 2021 as a whole, GDP growth rebounded, expanding 3.1% following the 5.6% contraction in 2020.
The upturn reflected improvements in private consumption, fixed investment and exports compared to the previous period. Private consumption increased 3.7% in the fourth quarter, which was above the third quarter's 4.2% contraction. Public spending growth grew at 4.3% (Q3: +8.0% yoy). Meanwhile, fixed investment slid at a softer rate of 3.3% in Q4, compared to the 10.8% decrease logged in the prior quarter.
On the external front, exports of goods and services increased 13.3% on an annual basis in the fourth quarter, which was above the third quarter's 5.1% expansion. In addition, imports of goods and services growth sped up to 14.6% in Q4 (Q3: +11.7% yoy).
On a seasonally-adjusted quarter-on-quarter basis, GDP made a strong recovery, growing 6.6% in Q4, contrasting the previous period's 3.6% decrease. Q4's reading marked the best result since Q3 2020.
Commenting on the release, analysts at Goldman Sachs remarked:
“As the reopening boost was larger than anticipated, it pulled forward into 2021 some of the reopening impulse we were factoring into our H1 2022 growth forecasts. Consequently, we scale down our sequential growth expectations, primarily in Q2 when we had built in a strong reopening-related sequential rebound in our forecast profile. We revise our Q2 sequential growth down to 1.9% s.a. qoq, from 2.4% s.a. qoq previously.”
Author: Jonuel Pérez, Junior Economist