The country’s gross domestic product (GDP) contracted by 5.6% for the year 2020, leading Malaysia to its worst total output since the Asian Financial Crisis of 1998. The -5.6% annual GDP falls below the government’s initial projection of -4.5% for the year.
Malaysia’s GDP registered a bigger decline of 3.4% in the fourth quarter of 2020 compared to the contraction of 2.7% in Q3, with the economy’s recovery impacted by the tightening of movement restrictions at the end of the year. For comparison, Malaysia’s GDP measured at -17.1% in 2Q2020 and grew by 0.7% in 1Q2020. In 2019, the country’s GDP grew by 4.3% year-on-year.
According to Department of Statistics Malaysia (DOSM) data, subdued demand remained the underlying factor for negative growth as the third wave of Covid-19 infections – which began in October – kept the job market volatile and forced consumers to spend less.
“Private consumption remains in contraction, weighed down by weak income conditions and tighter movement restrictions,” said DOSM chief statistician Datuk Seri Mohd Uzir Mahidin. Employment data also remained weak, contracting sharper in the October-December period after improving slightly in the previous quarter.
Looking forward, the national GDP is projected to grow between 6.5-7.5% for the year 2021, with this forecast being given by Bank Negara Malaysia last year. However, given the rise of new developments since then, the central bank will decide whether it needs to revise this initial growth forecast next month.
(Source: Malay Mail)
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