Malaysia growth rate expected at +5.6%yoy in 4Q21

Malaysia GDP to Rebound to +5.6%yoy in 4Q21 with the growth rate expectations boosted by reduced stress on healthcare and rapid vaccination programme

Improving activities as the economy reopens and the new normal sinks in. The reduced stress on the healthcare system and the progress of the vaccination programme allowed the government to gradually reopen the economy.

Following the relaxation of lockdown restrictions, sentiment started to improve even from 3QCY21, with the increase in indices for consumer sentiment and business condition.

IPI growth picked up as businesses resumed operations. IPI increased by +6.9%yoy in 4QCY21, a strong rebound from the -1.1%yoy contraction in 3QCY21. 

Return to work

The increased industrial output was in line with higher capacity utilization as more workers who had been fully vaccinated returned to work and companies increased production to cope with the growing demand.

Higher distributive trade as spending recovered. Distributive sales also picked up in 4QCY21, rebounding to +5.1%yoy (3QCY21: -9.1%yoy). The relaxation on people’s mobility and the continuation of interstate travels resulted in higher consumer spending and pent-up demand.

“We forecast GDP growth at +5.6%yoy for 4QCY21. Following the reopening of the economy and relaxation of lockdown restrictions, we expect GDP to rebound and grow by +5.6%yoy in 4QCY21 (3QCY21: -4.5%yoy). For the full-year growth, GDP is estimated to grow at +3.7% (2020: -5.6%),” says MIDF.