Kuala Lumpur May 11 — Malaysia’s gross domestic product (GDP) contracted by 0.5% in the first quarter of the year, the statistics department announced today.
At a press conference today, Chief Statistician Mohd Uzir Mahidin said this was a “better-than-expected” performance despite the implementation of the second movement control order (MCO) in January.
“This smaller contraction was supported mainly by improvement in domestic demand and continued support from better external conditions.
“These factors more than offset the impact from labour shortage and site shutdowns due to Covid-19 outbreaks,” he said.
As for the country’s monthly GDP performance, Uzir said January and February stood at 3.5% and 3.6%, respectively, but rebounded in March to 6%.
He noted that all economic sectors continued to improve in the first quarter, particularly the manufacturing sector which grew by 6.6% compared with 3% last year. This was mainly driven by electrical, electronics and optical products, as well as petroleum, chemical, rubber and plastic products.
The agricultural sector also grew by 0.4%, a turnaround from a decrease of 1% last year, due to better performance in livestock, forestry and logging, as well as other agriculture.
Although there was a decrease in the services, mining and quarrying and construction sectors compared with last year, Uzir said it was still an improvement from the previous quarter.
These growths were contributed by better demand in consumer-related activities, improved production in crude oil and natural gas, as well as more commercial projects nearing completion.
Uzir added that all expenditure components showed signs of recovery, led by exports and imports which rebounded to double-digit growths due to the expansion in goods. However, exports of services continued to decline as the country’s borders remained closed to leisure travel.
Meanwhile, Bank Negara Malaysia (BNM) governor Nor Shamsiah Mohd Yunus maintained that the country was on track to register a GDP growth of 6% to 7.5% this year.
Despite the latest nationwide lockdown, she said its impact on economic growth was likely to be less severe than the first MCO in March 2020.
“With most economic sectors to remain open, we do not expect MCO 3.0 to significantly impact the overall growth trajectory, to the extent seen in the second quarter of last year,” she said.
Nor Shamsiah said the country was also expected to benefit from the improvement in external demands, adding that the banking system also remained resilient and can support ongoing economic recovery.
