Malaysia's GDP Growth To Stand At 0.5% In Q1 2021, Says Moody's Analytics

11 May 2021

Malaysia's GDP Growth To Stand At 0.5% In Q1 2021, Says Moody's Analytics

The gross domestic product (GDP) of Malaysia is expected to grow by 0.5% quarter-on-quarter during the first quarter of 2021 (Q1 2021), a reversal of the 0.3% contraction registered in the fourth quarter of 2020, according to Moody’s Analytics.

It said that while the country faced a severe resurgence of COVID-19 cases which peaked in February 2021 as well as tighter restrictions that dampened domestic consumption’s revival, the economy benefitted from a strong trade position, reported Bernama.

Supported by recovering global demand for manufactured goods, exports were also bolstered by a hike in global demand for semiconductors, according to Moody’s Analytics.

“We expect gains from the pickup in external demand to have largely driven the March-quarter growth,” it said in a note as quoted by Bernama.

What Will Happen To Your Home Loan If The Economy Deflates Or Inflates? Check Out This Article To Find Out.

In May 2020, Bank Negara Malaysia (BNM) left its benchmark policy rate unchanged at 1.75%, the lowest in over 10 years.

Malaysia’s industrial production increased by 9.3% year-on-year in March 2021, while manufacturing output rose 12.7% year-on-year and electricity climbed 10.3% year-on-year. Mining output, on the other hand, contracted 1.9% year-on-year.

“It is true that sizeable gains in exports over the March quarter more than likely offset the softness in domestic consumption as producers benefitted from recovering global demand for manufactured goods, while the net position was bolstered by global demand for semiconductors and recovering commodity prices,” said Moody’s Analytics.

“But this also reflects an incomplete and unsustainable revival.”

With substantial monetary and fiscal stimulus provided since early last year, Moody’s Analytics noted that policymakers are running out of space for further accommodation.

“Delivering another rate cut amid the resurgence will not only gain limited traction in cushioning demand, but it runs a higher risk of triggering capital outflows, which emerging markets are susceptible to,” it said.

“This should be an additional risk that BNM will want to guard against.”


Have a question about the property market? Post them on AskGuru and let our experts help you!


You may also like these articles

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 foreca

Continue Reading12 May 2020

Malaysia’s fiscal deficit to hit 7% of GDP, World Bank

World Bank expects Malaysia’s fiscal deficit to widen to 7% of this year’s gross domestic product (GDP) on the back of increased expenditure as well as downward pressures on revenue.The latest edi

Continue Reading26 Jun 2020

World Bank cuts 2020 GDP forecast for Malaysia to -4.9%

The World Bank expects Malaysia’s gross domestic product (GDP) to contract by 4.9% this year, which is bigger than its earlier forecast of a 3.1% contraction, on the back of a sharper-than-expected

Continue Reading30 Sep 2020

RHB revises Malaysia’s GDP growth forecast in 2021 down to 6.3%

RHB Banking Group has revised its 2021 growth forecast for Malaysia’s economy downwards to 6.3% from 7% previously.This comes as it expects the country’s economic recovery to remain challenging in

Continue Reading10 Dec 2020

Malaysia's GDP To Expand 5.1% In 2021, Says Economist

Maybank Investment Bank Bhd (Maybank IB) expects Malaysia’s economy to expand by 5.1% this year, following an expected contraction of 5.4% in 2020.Suhaimi Ilias, Chief Economist of Maybank IB, belie

Continue Reading6 Jan 2021