First quarter GDP down 0.5pct

 

Malaysia's GDP contracted by 0.5 percent during the first quarter of this year compared to the year before.

According to the Statistics Department (DOSM), the manufacturing and agriculture sector reported growth while the services, mining and construction sector contracted.

On the demand side, DOSM noted strong growth in exports and government spending, amidst negative growth in private consumption.

"The gradual recovery of Malaysia’s economy was influenced by the reopening of more economic activities during the movement control order (MCO) 2.0 which is less stringent than the MCO that was imposed last year and also benefited from various stimulus packages to steer the economic recovery.

"The economy was also spurred by disposable income due to withdrawal of i-Sinar, i-Lestari and the increase in commodity prices such as oil palm and rubber," said chief statistician Mohd Uzir Mahidin.

Regionally, Indonesia (-0.74 percent) and the Philippines (-4.2 percent) also saw Q1 contractions, while Singapore (0.2 percent) and Vietnam (4.5 percent) were in positive territory.

Notable growths in sub-sectors includes "forestry and logging", which grew by 11.5 percent as well as "wholesale and retail trade" (1.2 percent).

The "food and beverages" and "accommodations" sub-sector were down 29.8 percent, which was a slight improvement from the previous quarter (-35.3 percent).

The DOSM said the slight improvement was due to the easing of MCO2.0 which extended the operation hours of restaurants and interstate travel was allowed to recovery MCO areas.

Private consumption remains dampened (-1.3 percent) but has improved compared to the previous quarter (-3.5 percent). Private consumption has been consistently in the negative since the start of the pandemic.

Conversely, government spending has accelerated at a much faster pace over the past four quarters (4.45 percent average) compared to the same previous period (2.55 percent).

The DOSM said that government spending increased 5.9 percent during the first quarter of this year due to higher spending in supplies and services.

The DOSM expects Malaysia to achieve economic expansion in the coming months due to the Covid-19 immunisation programme and short-term economic indicators from February.

It is uncertain if this projection took into account the nationwide MCO which will be imposed from tomorrow until June 7. - Mkini