Malaysia’s growth to continue in 2022 with further reopening

Monday, 28 February 2022  – Leading Index rises to a 7-month high. Malaysia’s near-term growth momentum is anticipated to strengthen as the growth in the leading index (LI) accelerated to +2.1%yoy in Dec-21 (Nov-21: +1.6%yoy), the highest rate since May-21.

The continued improvement was mainly buoyed by the increment in the number of housing units approved, an analyst firm says.

On the other hand, the coincident index (CI) which measures the overall economic performance, eased to +2.2%yoy (Nov-21: +3%yoy), in view of the recent resurgence in Omicron-led Covid-19 infections.Exports growth moderated but still at double-digit growth.

Malaysia’s total trade in Jan-22 stood at RM203.b, or +24.8%yoy higher than Jan-21 driven by sustained growth in both exports and imports.

Export growth

Exports rose at +23.5%yoy in Jan-22, sustaining double-digit growth for the sixth straight month. With sustained growth, Malaysia’s trade sector has been benefiting from the rising global demand for manufactured products and commodities, particularly palm oil and LNG.

“We maintain Malaysia’s GDP to grow by 6% in 2022. Further reopening of the economy such as lifting the ban on international travels will support for a better growth outlook this year.

“With high vaccination rate, there is less need for the government to tighten Covid-19 restrictions given the ability of the healthcare system to withstand the recent resurgence in Covid-19 infections. We maintain our projection that Malaysia’s economy will grow stronger at 6% this year (2021: +3.1%),” says MIDF.