KUALA LUMPUR, July 25 — Malaysia’s Gross Fixed Capital Formation (GFCF), the second largest component of gross domestic product (GDP) with a 20.1 per cent share to the total economy, contracted by a marginal 0.9 per cent to RM278.7 billion in 2021 from RM281.2 billion in 2020.

Department of Statistics Malaysia (DOSM) Chief statistician Datuk Seri Mohd Uzir Mahidin said the contraction, however, is significantly lower than the 14.4 per cent contraction in 2020.

“The gradual recovery of GFCF encouraged a higher economic capacity thus, increasing potential output in the long run,” he said in a statement today.

He said the GFCF in 2021 for all sectors recorded a negative growth except for the manufacturing sector.

“The favourable performance in this sector was supported by petroleum, chemical, rubber and plastic products as well as the electrical, electronic and optical products transport equipment, which rebounded to 9.7 per cent and 5.9 per cent, respectively,” he said Meanwhile, he said GFCF in the services sector diminished 1.3 per cent from a negative 12.4 per cent in the preceding year influenced by finance, insurance, real estate and business services activities, which deteriorated 4.6 per cent in 2021.

“GFCF for mining and quarrying sector dropped 14.7 per cent in 2021 from a downturn of 25.7 per cent in the previous year while the construction sector also tumbled 1.1 per cent, slower than the 2.6 per cent decrease in 2020,” he said.

Mohd Uzir said a similar downward trend was also seen in the agriculture sector, which contracted marginally by 0.7 per cent as compared to a negative 8.9 per cent in 2020 attributed to lethargic performance across all sub-sectors.

By type of asset performance, he said structure remained the major contributor to GFCF with 50.7 per cent share, which eased 10.1 per cent in 2021 from the previous year.

He said the ICT equipment and other machinery and equipment soared by 16.6 per cent while intellectual property products grew by 2.9 per cent in 2021.

Besides that, he said the private sector continued to be the main driver with a contribution of 77.6 per cent, registering an expansion of 2.6 per cent as compared to the preceding year.

“Nevertheless, the public sector, which accounted for 22.4 per cent, showed a downward trend of 11.3 per cent in 2021,” he said, adding that the services and manufacturing activities were the main contributors to GFCF of the private sector.

He said the share of services activity increased to 63 per cent compared to 62.9 per cent in 2020.

“Furthermore, the manufacturing activity upholds its position as the second largest contributor with a share of 22.2 per cent as compared to 21 per cent in the previous year.

“Meanwhile, other activities contributed 14.8 per cent to the total GFCF of the private sector,” he said.

He said GFCF of the public sector was led by services activity with a contribution of 81.5 per cent followed by the manufacturing and mining and quarrying activities with contributions of 9.1 per cent and 8.6 per cent, respectively.

“Easing of movement across the state had a significant impact on economic opening, which allows entrepreneurs to pick up business momentum and able to drive the economic recovery process in Malaysia,” he said.

He added that the continued growth in fixed asset investment related to machinery and equipment signals the recovery trend of GFCF in 2022. — Bernama