KUALA LUMPUR – Malaysia’s economic growth for 2021 is now projected to be between 3% and 4%, lower than the earlier projection of between 6% and 7%, said Bank Negara Malaysia (BNM) Governor Datuk Nor Shamsiah Mohd Yunus.
She said the new growth projections are lower compared with the previously announced growth range, largely due to the reimposition of nationwide Covid-19 containment measures following the spike in infections.
“Nevertheless, the expected reopening of the economy will support a gradual recovery in the fourth quarter this year (Q4 2021), with higher global growth and sustained policy support providing a further lift to economic growth,” she told a press conference on the Economic and Financial Developments in Malaysia in Q2 2021 report released today.
The country’s economy grew by 16.1% in Q2 compared to -0.5% in Q1, mainly supported by improvement in domestic demand and a continued robust exports performance.
BNM said the strong growth also reflects the low base from the significant decline in activity during Q2 2020.
“While the containment measures weighed on growth, greater adaptability to restrictions and ongoing policy support have partly mitigated the impact,” Nor Shamsiah said.
Economic activity picked up at the start of Q2, but slowed down thereafter, following the reimposition of stricter containment measures nationwide under the Covid-19 lockdown, while all economic sectors registered an improvement, particularly the manufacturing sector.
On the expenditure side, growth was driven by higher private sector spending and strong trade activity.
On a quarter-on-quarter seasonally adjusted basis, the economy registered a decline of 2.0% against 2.7% in Q1, weighed by the tighter containment measures.
Nor Shamsiah noted that Malaysia’s recovery is expected to accelerate further going into 2022, supported by a gradual normalisation of economic activities as well as positive spillovers from continued improvement in external demand. – Bernama, August 13, 2021
