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Malaysia: Improving trend to continue
The Asean-5 economies are in a technical recession based on their second quarter gross domestic product (GDP) figures and this is induced by the Covid-19 pandemic.
Malaysia, Indonesia, the Philippines, Singapore and Thailand implemented lockdowns and this had disrupted economic activities in almost all areas be it domestic or export-oriented.
Sectors worst hit include travel, tourism and retail. They registered negative growth of 10.3% quarter-on-quarter (q-o-q) with all five countries recording decline in GDP on quarterly basis for two sequential quarters, according to a report by MIDF Research.
On an annual basis, the Asean-5 economy stumbled -10.2% y-o-y in the second quarter.
This is a health crisis and the impact is far greater than that recorded during the Global Financial Crisis. At that time, the Asean-5 growth remained in the positive territory (Q209: 1.0% y-o-y; Q109: 0.1% y-o-y) as negative growth in Malaysia, Singapore and Thailand was offset by sustained economic growth in Indonesia and the Philippines.
Among the Asean-5, Malaysia’s GDP plunged 17.1%y-o-y in the second quarter, making it the worst performer among the countries.
But with the re-opening of the economies, the macroeconomic indicators have shown improvement in industrial production, trade flows and retail sales, which has slumped since April.
MIDF expects an overall improving trend to continue for the remaining of the year in line with resumption of activities globally. This will be further supported by a low inflation environment and expansionary monetary and fiscal policies.
However, it will take time to get back to the pre-pandemic levels.
Source: https://www.thestar.com.my/business/business-news/2020/09/12/improving-trend-to-continue