Economic recovery may be derailed by Covid surge - stats department

 

Malaysia's economic recovery momentum may be derailed by the record-breaking daily new Covid-19 cases, warned the Department of Statistics Malaysia (DOSM).

It said this will dim prospects for stronger performance in the third quarter of 2021 despite the ongoing vaccine rollout.

“Given the scenario, the Leading Index (LI) posted a slower annual growth of 0.5 percent in June 2021. However, the LI declined 2.8 percent month-on-month.

“As such, a challenging economic outlook is forecasted for Malaysia in the months ahead,” said DOSM chief statistician Mohd Uzir Mahidin in a statement today in conjunction with the publication of the latest Malaysian Economic Statistics Review (MESR).

Accordingly, Bank Negara Malaysia (BNM) has revised its full-year gross domestic product (GDP) growth forecast for Malaysia to between 3 and 4 percent from the previous estimate of between 6 and 7.5 percent for 2021.

Uzir noted that the US, UK, China, Taiwan, South Korea, and Asean nations have shown signs of economic expansion.

As for Malaysia, GDP surged to 16.1 percent in the second quarter after four consecutive quarters of contraction, attributed to low base effects.

He added that “on the supply side, (GDP) was supported mainly by the continuous growth in the manufacturing sector which grew by 26.6 percent and the rebound in the services sector at 13.4 percent compared to a decline of 2.3 percent in the preceding quarter.”

“Nevertheless, on a quarter-on-quarter seasonal adjustment, the GDP contracted 2 percent from a growth of 2.7 percent in the preceding quarter,” he said.

For the first half of 2021, the domestic economy grew by 7.1 percent against a decrease of 8.4 percent in the same period last year.

DOSM said Malaysia's current account balance posted a surplus of RM14.4 billion in the second quarter, soaring 17.2 percent from the first quarter of 2021, “contributed by the better performance in goods as well as the lower deficit in secondary income.”

The Goods account posted a higher surplus of RM40.7 billion as both exports and imports of goods showed encouraging performances in the second quarter.

Exports surged by RM18.5 billion to register RM244.0 billion while imports increased by RM14.5 billion to RM203.4 billion, and foreign direct investment recorded an inflow of RM8.2 billion.

Direct investment abroad by Malaysian investors registered a net outflow of RM4.0 billion in the quarter.

Malaysia's total trade surged 39 percent year-on-year, mainly driven by the low base effect and better external demand while trade surplus increased RM56.4 billion, 122.7 percent higher than the second quarter of 2020.

In the labour sector, the number of employed persons inclined 2.2 percent year-on-year to 15.21 million persons compared to the same quarter of last year (14.88 million).

“The upward trend was also observed for the employment-to-population ratio which rose by 0.4 percentage points to 65.0 percent. Meanwhile, the unemployment rate dropped by 0.3 percentage points to record 4.8 percent,” Uzir said.

- Bernama