Malaysia's economic growth rebounded +3.6%

GDP returned to an expansionary mode in 4Q21 with Malaysia’s economic growth advancing by +3.6% in 4Q21 following a contraction of -4.5%yoy in the prior quarter.

“The growth was however slower than our expectations (+5.6%yoy) but surpassed the market consensus (+3.3%yoy).

“The positive growth was due to the recovery in domestic consumption and business activities amid the relaxation of the stringent restrictions. For 2021, Malaysia’s economic growth rebounded to +3.1% in 2021 (2020: -5.6%),” says MIDF.

Domestic demand

Domestic demand recovered at a rapid pace. All the expenditure components except investment activities (both public and private sectors) contributed positively to the economic growth during the quarter.

Private consumption rebounded and grew by +3.7%yoy (3Q21: -4.2%yoy) as consumers increase spending amid the reopening of economic sectors and lifting the ban on interstate travels.

Rebound in manufacturing, services and agriculture sectors. Growth for all major economic sectors improved in 4Q21 as shown by the rebound in manufacturing, services and agriculture sectors as well as smaller contraction in construction and mining sectors.

Business activities had been increasing as more businesses reopened and resumed operations as most states transitioned to Phase 4 of National Recovery Plan.

“We maintain Malaysia’s GDP growth forecast at 6% for 2022. For this year, we maintain our projection for Malaysia’s economy to grow at 6%.

“We expect the 2022 economic outlook will be relatively better because the recovery last year had been weighed down particularly by the spread of Delta variant and imposition of full lockdown,” says analysts.