PETALING JAYA,Feb 11: Malaysia’s gross domestic product (GDP) declined by 3.4% in the fourth quarter of 2020, taking the annual economic growth to -5.6% overall, the lowest since 1998.
At a press conference today, Chief Statistician Mohd Uzir Mahidin said the 2020 contraction was mainly due to the enforcement of the movement control order (MCO) to curb the Covid-19 pandemic.
He noted that in 1998, during the Asian economic crisis, Malaysia recorded contractions in its GDP for five consecutive quarters before recording positive growth.
He said most economic sectors continued to contract in the fourth quarter, except for manufacturing, which remained positive thanks to continued demand for electrical and electronic products.
The service sector recorded a larger contraction of 4.9% mainly due to movement restrictions under the conditional MCO that restricted mobility and operating hours. The food and beverage, accommodation, transport and storage subsectors were hit badly.
“The agriculture sector dropped slightly at 0.7% due to the contraction in the oil palm, fishing, forestry and logging, and rubber subsectors. However, the livestock subsector improved this quarter.
“The construction sector contracted 13.9% from -12.4% in the preceding quarter. This is in line with the average value of work done per project decreasing in the fourth quarter of 2020,” he said.
Throughout the past year, the service sector saw a contraction of 5.5%, followed by manufacturing (-2.6%), agriculture (-2.2%), mining and quarrying (-10%) and construction (-19.4%).
Meanwhile, all expenditure components also recorded negative growth, except for government final consumption expenditure, which expanded by 4.1%.
“Private final consumption expenditure declined 4.3% while gross fixed capital formation plummeted 14.5%.
“Besides that, net exports fell sharply by 12.3%. This was attributed to the slower export performance compared with imports,” he said.
Meanwhile, Bloomberg quoted Bank Negara Malaysia governor Nor Shamsiah Mohd Yunus as saying: “Going into 2021, the Malaysian economy is projected to recover.
“A key factor supporting growth in 2021 is the improvement in global demand as the rollout of vaccines is expected to lift consumer and business sentiments.
“This will boost private spending activity and support the economic recovery.”
Nor Shamsiah declined to give an estimate for 2021’s GDP — which the central bank previously forecast at 6.5%-7.5% growth — saying it would be addressed next month.
“There have been many developments since the earlier forecast” and the bank was continually reassessing the data, she said.