Thailand
Malaysia’s 3Q GDP contracts at smaller pace
KUALA LUMPUR: Malaysia’s economy contracted at a smaller pace of 2.7% in the third quarter ended Sept 30,2020 compared with the 17.1% plunge in the second quarter, underpinned by the recovery in the manufacturing sector.
The Statistics Department said on Friday the economic performance during this pandemic period was also measured on the monthly basis where July posted a lower decline 2.7%, August contracted to negative 3.6% while September improved to a smaller negative 1.6%.
Officially, the country has entered into a technical recession due to contractions in 2Q and 3Q. For 2020, the government expects GDP to contract between 3.5% and 5.5% before expanding between 6.5% and 7.5% next year.
“On a quarter-on-quarter seasonally-adjusted basis, the economy turned around to register an expansion of 18.2% (2Q 2020: -16.5%), ” it said.
The 3Q GDP saw manufacturing growing by 3.3% compared with a 18.3% decline in 2Q, supported by electrical, electronic & optical and vegetable and animal oils & fats and food processing products.
The favourable performance was attributed to export oriented industries which turned around to 5% (2Q 2020: -13.5%) and this was reflected in the performance of total exports in September 2020 which recorded a positive double-digit growth.
The services sector recorded a smaller negative 4%, an improvement from negative 16.2% in 2Q.
The better performance in finance & insurance and information & communications sub-sectors have contributed to the reduced contractions in this sector.
As for the agriculture sector, it dipped by 0.7% due to the decrease in fishing and rubber sub-sectors.
Malaysia has benefitted from the strong increase of crude palm oil prices which grew by 37.5% as compared to 15% in 2Q.
The services sector recorded a smaller negative 4.0%, an improvement from negative 16.2% in 2Q.
The construction sector fell 12.4% due to the decline in all segments except for specialised construction activities.
This was reflected by the return-to-normal operating hours at the construction sites during the Recovery Movement Control Order.
In a separate statement, Bank Negara Malaysia said for 3Q, headline inflation recorded a smaller negative at -1.4%, due mainly to the higher domestic retail fuel prices, in line with the recovery in global oil prices. Core inflation moderated slightly to 1%.
Bank Negara said in 3Q, the ringgit appreciated by 2.9% against the US dollar, following continued non-resident portfolio inflows.
On financing conditions, the central bank said net financing to the private sector continued to expand by 4.6% on an annual basis.
Outstanding loan growth increased during the quarter, supported mainly by household loans with broad-based improvements in loan demand.
“Outstanding business loans registered modest growth due to slower loans disbursed for working capital purposes. Loan disbursement levels also recovered, with disbursements to households exceeding its historical levels, ” it said.
Source: https://www.thestar.com.my/business/business-news/2020/11/13/malaysias-3q-gdp-contracts-at-smaller-pace