Malaysia’s GDP contracted 2.7% in 3Q vs 17.1% in 2Q

Thursday 25 Apr 2024

KUALA LUMPUR (Nov 13): Malaysia’s gross domestic product (GDP) shrank by 2.7% in the third quarter of 2020 (3Q20) compared with a sharper contraction of 17.1% in 2Q20. The improved performance largely reflected the impact of the reopening of the economy after the Movement Control Order and better external demand conditions.

For comparison, Malaysia’s GDP contracted 17.1% in 2Q20, while it grew 0.7% in 1Q20.

Chief Statistician of Malaysia Datuk Seri Dr Mohd Uzir Mahidin, who spoke during Bank Negara Malaysia’s 3Q20 GDP virtual briefing today, said on a month-to-month basis, the GDP in July declined to 2.7%, while it declined 3.6% in August and rebounded slightly to a decline of 1.6% in September.

Private consumption recovered significantly, registering a smaller drop of 2.1% in 3Q20 compared to 18.5% in 2Q20. “This was supported by a gradual recovery in broad income conditions amid resumption of economic activities. The performance was also lifted by the implementation of the stimulus measures,” said Mohd Uzir.

Public consumption expanded to 6.9%, supported by higher government spending on supply and services.

Investment in both private and public sectors improved slightly to negative 9.3% and negative 18.6% respectively, particularly from better investment structures, said Mohd Uzir.

Meanwhile, Malaysia’s net exports staged a strong growth rebound of 21.9%, attributed to faster recovery in exports. This is in line with the recovery in external demand, said Mohd Uzir. In comparison, net exports fell to a negative 38.6% in 2Q20.

On the supply side, the economic activity improved across most sectors as Malaysia eased Covid-19 containment measured during 3Q20.

The manufacturing sector rebounded 3.3%, backed by stronger external demand for electrical and electronic (E&E) and medical related products.

“Furthermore, domestic oriented industries also posted an improvement due to an increase [in] domestic demand. The agriculture sector meanwhile recorded a marginal decline of 0.7% weighed by slower growth in the oil palm subsector. However the livestock and other agriculture subsectors grew 2% and 5% respectively,” Mohd Uzir said.

Services sector improved to negative 4% during 3Q20 compared with a negative 16.2% in 2Q20. The improvement, said Mohd Uzir, was mainly due to the better performance in the finance, insurance and ICT subsectors.

On mining and quarry, it registered a smaller decline of 6.8% compared to negative 20% in the previous quarter, as demand for oil and gas services picked up.

Construction sector declined to negative 12.4%, which however improved from negative 44.5% in 2Q20, attributed to the resumption of projects across all subsectors.

Edited ByKathy Fong

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