KUALA LUMPUR – Malaysia’s economy last year contracted at its fastest pace in more than two decades, as the coronavirus shuttered businesses and hammered the country’s key exports, data showed today.
Full-year gross domestic product shrank 5.6%, the statistics department said, marking the worst performance since a 7.4% drop in 1998 during the Asian financial crisis.
In the fourth quarter, GDP slipped 3.4% year-on-year, worse than had been forecast as a Covid-19 resurgence forced authorities to re-impose measures to curb its spread.
Statistics Department chief statistician Datuk Seri Mohd Uzir Mahidin said the country last recorded a contraction in 2009 at -1.5%
“The slower growth in the quarter was driven by tighter movement restrictions and disruptions to commodity supplies, but was offset by continued growth in external demand.”
The Southeast Asian nation initially kept the virus in check by quickly imposing a lockdown last year that closed most businesses for weeks, but it was hit hard by a second wave once restrictions were eased.
Net exports fell 12.3% last year, official data showed. Malaysia’s economy is underpinned by exports of commodities, including oil and gas, palm oil and manufactured goods, such as electronics.
The manufacturing sector shrank 2.6%, the agricultural sector declined 2.2%, and construction shrank by a fifth.
Despite the dismal figures, there is evidence that an upturn “in the manufacturing and commodity sectors has taken root”, Yeah Kim Leng, economics professor at Sunway University Business School, said.
But he warns that “the pandemic resurgence and accompanying containment measures will likely dampen the economic recovery in the first half of this year”.
The International Monetary Fund has warned global GDP will be about US$22 trillion (RM88 trillion) smaller than previously expected between 2020 and 2025 because of the virus crisis. – AFP, February 11, 2021
