Malaysia’s GDP Contracted 1.5% In Q1, Economists

Pavither May 12, 2020

Malaysia’s GDP contracted 1.5% in Q1, economists

With the Covid-19 pandemic shattering external demand and private consumption, Malaysia’s economy is believed to have contracted in the first quarter – its first in over a decade.

The median forecast from a survey of 12 economists was for the country’s gross domestic product to fall 1.5% year-on-year in Q1 2020, the first contraction since Q3 2009 during the global financial crisis.

Individual forecasts ranged between a 0.8% GDP growth and a 4.2% decline, reported Reuters.

Alex Holmes, Asia economist for Capital Economics, noted that Malaysia’s economy took a heavy beating from sharp downturns in external trade, tourism and global crude prices, aggravated by poor domestic activity due to the government’s curbs on businesses and movement.

Click here to know how the nationwide asking prices have been performing during a pandemic?

“While a gradual easing of restrictions, both at home and abroad, should see activity rebound in the second half of the year, output is still likely to be much lower in 2020 than last year,” said Holmes, who expects the economy to decline 5% this year.

And while Malaysia’s statistics department had delayed the release of factory output data for March, economists predict that industrial production to have sharply dropped as most businesses and factories were ordered to cease operations in a bid to limit the spread of Covid-19.

Exports declined 4.7% in March on the back of a decline in shipments across sectors as well as trade partners.

Last month, Malaysia’s central bank had predicted the economy to either marginally grow by 0.5% or contract by up to 2% due to the pandemic, underscoring that “great uncertainty remains”.

Bank Negara Malaysia also slashed its key interest rate last week, its third consecutive cut for this year, pushing it down to a historic low of 2%.

Standard Chartered said domestic activity would be of greater concern for Southeast Asia’s third-biggest economy, as the movement control order (MCO) issued by the government had been “relatively stringent”.

It added that “the degree of uncertainty to the forecast is very high”.

“More importantly, Q2 GDP is likely to be significantly worse than Q1 as the MCO has only just been eased to conditional MCO (CMCO) beginning May 4,” it said in a note.


Check out these latest project reviews today! Or read our helpful Guides to learn all about the various property buying, selling and renting tips!


You may also like these articles

JPPH Expects Property Market To Remain Resilient.

Despite the economic headwinds brought about by the Covid-19 pandemic, the Valuation and Property Services Department (JPPH) expects Malaysia’s property market to remain resilient.This comes as the

Continue ReadingApril 30, 2020

Demand For Penang Properties Remain Strong

Properties in Penang continued to receive robust demand despite the economic downturn caused by the Covid-19 pandemic and the movement control order (MCO) rolled out by the government to control its s

Continue ReadingMay 4, 2020

Bank Negara Slashes OPR To 2%

Bank Negara Malaysia (BNM) has slashed its Overnight Policy Rate (OPR) by 50 basis points to 2%. It correspondingly reduced the floor and ceiling rates of the OPR corridor to 1.75% and 2.25%, respecti

Continue ReadingMay 6, 2020

OPR Cut Spillover Effect On Property Sector “Negligible”

With the Covid-19 disruption, slowing income trend and contraction in gross domestic product, CGS-CIMB Research does not expect the latest cut on the overnight policy rate (OPR) to have a significant

Continue ReadingMay 8, 2020