GDP in Malaysia
Malaysia - GDP
Economy contracts at sharper-than-expected pace in Q3, weighed on by Covid-19 curbs
The economy contracted a heavy 4.5% in annual terms in the third quarter of the year, contrasting the prior quarter’s 16.1% expansion, as surging Covid-19 cases in the period prompted the reinstatement of tough restrictions, hindering activity. Q3’s result marked the worst print in over a year and came in well below market analysts’ expectations of a 1.3% contraction.
The third quarter’s slump was broad-based, as both domestic demand and the external sector weighed on the headline reading. Household spending tumbled 4.2% in year-on-year terms in the quarter, contrasting the 11.7% expansion tallied in the prior quarter. Similarly, capital spending also swung into contraction, plunging 10.8% in the quarter (Q2: +16.5% yoy), as tight restrictions and pandemic-related uncertainty discouraged investment. More positively, public spending was robust in the quarter, albeit easing from Q2, as the government continued to deploy its fiscal tools to counter the negative economic impact of the restrictions (Q3: +8.1% yoy; Q2: +9.1% yoy).
A similar story unfolded in the external sector, with growth in exports of goods and services cooling markedly to 5.1% year-on-year in Q3 from 37.4% in the previous quarter, as rising numbers of new infections in key trading partners suppressed foreign demand. Meanwhile, growth in imports of goods and services also moderated, but to a lesser extent than exports (Q3: +11.7% yoy; Q2: +37.6% yoy). As a result, the external sector deducted a hefty 3.1 percentage points from the headline reading, contrasting the prior quarter’s 1.8 percentage-point contribution.
Similarly, on a seasonally-adjusted quarter-on-quarter basis, the economy contracted 3.6% in the third quarter, deteriorating from the 1.9% decline logged in the second quarter.
Commenting on the growth outlook, analysts at Goldman Sachs expect the recovery to take hold from Q4 onwards:
“As the larger-than-expected output decline in Q3 was likely due to temporary factors such as virus-related capacity restrictions at manufacturing units which are currently in the process of being scaled back, we build back a sharper sequential growth rebound in Q4 and H1 next year. Overall, we now expect real GDP to grow 2.8% in 2021 (vs. 3.1% previously). Going forward, we expect GDP growth to accelerate to 6.6% in 2022 (vs. 6.8% previously), with a strong reopening boost to activity making itself felt over the next few quarters amid tailwinds from higher commodity prices, and a waning but still significant boost from exports.”
FocusEconomics panelists expect GDP to expand 5.7% in 2022, which is up 0.1 percentage points from last month’s forecast. In 2023, our panel sees GDP growth at 4.9%.
Malaysia - GDP Data
|Economic Growth (GDP, annual variation in %)||5.1||4.4||5.8||4.8||4.3|
5 years of economic forecasts for more than 30 economic indicators.
Malaysia GDP Chart
Source: Department of Statistics Malaysia and FocusEconomics calculations.
|Bond Yield||3.32||0.15 %||Dec 31|
|Exchange Rate||4.09||0.0 %||Jan 01|
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January 21, 2022
Consumer prices rose 0.40% over the previous month in December, up from November’s 0.24% rise.
January 3, 2022
The Manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, posted another increase in the final stretch of the year, rising to 52.8 in December from 52.3 in November.
December 28, 2021
Merchandise exports grew for the fourth successive month, with growth coming in at 31.2% year-on-year in USD terms in November, up from October’s 25.4% increase.
December 22, 2021
Consumer prices increased 0.24% over the previous month in November, coming in below October's 0.73% rise.
December 20, 2021
At its first meeting of the year on 20 January, the Monetary Policy Committee of Bank Negara Malaysia (BNM) kept the overnight policy rate stable at its all-time low of 1.75%, marking the ninth consecutive hold, coming in line with market expectations. Promoting the economic recovery underpinned the Bank’s decision to maintain its accommodative stance, and the move was supported by well-anchored inflation expectations.