KUALA LUMPUR, Aug 13 — Malaysia’s second quarter (Q2 2021) gross domestic product (GDP) rose by 16.1 per cent year-on-year after previously shrinking for four consecutive quarters, the Department of Statistics Malaysia (DoSM) announced today.
Chief Statistician Datuk Seri Mohd Uzir Mahidin said the stronger growth had followed a low base following a significant decline in activity in the same quarter a year ago (Q2 2020), with economic performance supported mainly by the improvement in domestic demand and continued robust exports performance.
Based on growth recorded, Mohd Uzir however also noted that the level of economic value in this quarter remained lower than the pre-pandemic level of fourth quarter 2019.
“However on a quarter-on-quarter seasonally-adjusted basis, the economy registered a decline of 2 per cent, weighed by the tighter containment measures,” he said during the joint launch of the Economic and Financial Developments in Malaysia in the Second Quarter of 2021 with Bank Negara Malaysia (BNM) here.
Mohd Uzir said the economic performance in Q2 2021 was supported by the continuous growth in the manufacturing sector and the rebound of the service sector on the supply side.
In comparison, the first quarter of 2021 (Q1 2021) notched a decline of 2.7 per cent from the previous quarter.
“While the containment measures weighed on growth, greater adaptability to restrictions and ongoing policy support have partly mitigated the impact,” BNM governor Datuk Nor Shamsiah Yunus was quoted as saying during the launch.
Echoing Mohd Uzir, she also said the growth in the second quarter was supported mainly by the improvement in domestic demand and continued robust exports performance, as well as the low-base effect amid the significant decline in activity during the second quarter of 2020.
“All economic sectors registered an improvement, particularly the manufacturing sector. On the expenditure side, growth was driven by higher private sector spending and strong trade activity,” she said.
The central bank also revised down its GDP forecast to between 3 per cent and 4 per cent for this year compared to its previous projection of between 6 per cent and 7.5 per cent made previously.
In March, BNM said the projections were supported by domestic factors such as consumption and a brighter external environment fuelled by vaccine rollout.
Nor Shamsiah said the latest revised growth projections were lower compared to the previously-announced growth range due in large part to the reimposition of nationwide containment measures and the strain placed on the economy.
“The downward revision reflects the impact from the implementation of the FMCO nationwide.
“On a seasonally adjusted quarterly basis, Malaysia’s GDP is expected to trough in Q3 2021 before returning to pre-pandemic levels in Q4 2021,” she said.
This comes as Malaysia currently grapples with a resurgence of Covid-19 infections with record-high cases of some 20,000 daily and hundreds of deaths reported in recent weeks.
Looking ahead, she expressed optimism that the recovery is expected to accelerate further going into 2022, supported by a gradual normalisation of economic activities following successful vaccination drives as well as the positive spillovers from continued improvement in external demand.
“Nevertheless, the expected reopening of the economy would support a gradual recovery in the fourth quarter this year, with higher global growth and sustained policy support providing a further lift to economic growth,” she said.
Malaysia entered into a ‘total lockdown’ back in June under the National Recovery Plan (NRP) that was later extended and has to date continued on in many states in Malaysia.
The full presentation of the Malaysia Economic Performance Second Quarter 2021 can be accessed at BNM’s official website here.