{"id":12343,"date":"2021-11-12T14:23:45","date_gmt":"2021-11-12T06:23:45","guid":{"rendered":"https:\/\/newmalaysiatimes.com\/?p=12343"},"modified":"2021-11-12T14:23:47","modified_gmt":"2021-11-12T06:23:47","slug":"malaysias-economy-contracts-4-5-percent-in-q3-amidst-covid-19","status":"publish","type":"post","link":"https:\/\/newmalaysiatimes.com\/?p=12343","title":{"rendered":"Malaysia\u2019s economy contracts 4.5 percent in Q3 amidst COVID-19"},"content":{"rendered":"\n

KUALA LUMPUR, Nov 12 — Malaysia\u2019s\u00a0economy contracted by 4.5 percent in the third quarter of 2021\u00a0(Q3 2021),\u00a0as opposed to the 16.1 percent\u00a0growth recorded in Q2 2021, said Bank Negara Malaysia (BNM). This was attributed to the reimposition of the nationwide containment measures\u00a0during the period —\u00a0in line with economists\u2019\u00a0expectations.<\/p>\n\n\n\n

In Q3 2020, Malaysia\u2019s gross domestic product (GDP) growth was at -2.7 per cent.<\/p>\n\n\n\n

\u201cThe performance was largely attributable to the strict containment measures — particularly in July — under Phase One of the National Recovery Plan (NRP)<\/p>\n\n\n\n

\u201cEconomic activity subsequently picked up as more states transitioned into Phase Two with less restrictive containment measures,\u201d said BNM Governor Datuk Nor Shamsiah Mohd Yunus during the BNM and the Statistics Department\u2019s joint press conference on Malaysia\u2019s Q3 2021 GDP performance.<\/p>\n\n\n\n

She said the domestic economy is on track to expand by 3.0 per cent to 4.0 per cent this year, supported by the increase in economic activities as containment measures are progressively relaxed, as well as continued policy support.<\/p>\n\n\n\n

The various relaxations of restrictions for fully vaccinated individuals, including interstate travel, would also spur tourism-related activities.<\/p>\n\n\n\n

Additionally, the strengthening global demand will continue to support export growth.<\/p>\n\n\n\n

Year-to-date, headline inflation had averaged at 2.3 per cent, and is projected to average between 2.0 per cent and 3.0 per cent for 2021.<\/p>\n\n\n\n

Headline inflation moderated to 2.2 percent\u00a0in Q3 2021,\u00a0mainly due to the dissipation of the base effect from fuel prices\u00a0and the implementation of the three-month electricity bill discounts, while core inflation remained at 0.7 per cent\u00a0during the quarter.<\/p>\n\n\n\n

\"containment\"<\/figure><\/div>\n\n\n\n

Underlying inflation, as measured by core inflation, is expected to average below 1.0 percent\u00a0for the year, while headline inflation\u00a0is projected to remain moderate in 2022.<\/p>\n\n\n\n

\u201cAs economic activity normalizes, core inflation is expected to edge upwards but remain benign, given the continued spare capacity in the economy and the slack in the labor market.<\/p>\n\n\n\n

\u201cThe outlook, however, continues to be subject to global commodity price developments and some risk from prolonged supply-related disruptions,\u201d said Nor Shamsiah.<\/p>\n\n\n\n

On the supply side, all economic sectors registered a contraction with the construction sector contracted the most due to operating capacity limits.<\/p>\n\n\n\n

She said on the expenditure side,\u00a0domestic demand declined by 4.1 percent (Q2 2021: +12.4 percent), mainly weighed down by the contraction in private consumption and investment activities, while the continued increase in public sector consumption spending provided support to growth.<\/p>\n\n\n\n

\u201cProgressive lifting of containment measures and continued improvements in the labor market will be key to support the recovery, going forward,\u201d she said.<\/p>\n\n\n\n

On the ringgit, Nor Shamsiah\u00a0said the\u00a0local currency\u00a0depreciated by 0.8 percent against the US dollar in Q3 2021,\u00a0reflecting\u00a0the broad strengthening of the US dollar on greater clarity from the United States (US) Federal Reserve that it would likely begin tapering its asset purchase program towards the end of the year.<\/p>\n\n\n\n

Net financing to the private sector recorded an annual growth of 3.9 percent in Q3 2021, reflecting the\u00a0outstanding loans\u00a0and outstanding corporate bonds\u2019 lower growth, as both\u00a0contracted to 2.9 percent and 6.5 percent, respectively,\u00a0during the quarter, from 3.6 percent and 6.9 percent in Q2 2021.\u00a0<\/p>\n\n\n\n

\u00a0Outstanding household loan growth moderated to 3.2 percent from 5.3 percent in Q2 2021, amid slower growth across all purposes.<\/p>\n\n\n\n

\u201cGoing forward into 2022, Malaysia\u2019s growth trajectory is expected to improve, given the resumption of economic activities, further improvement in the labor market, continued policy support, and expansion in external demand.<\/p>\n\n\n\n

\u201cThe progress and efficacy of vaccinations, compliance with Standard Operating Procedures (SOPs) as well as the ability to effectively contain outbreaks from any new COVID-19 variants of concern (VOCs) will be key to the expected recovery,\u201d she added.<\/p>\n\n\n\n

NMT<\/a> as reported by Bernama<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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