Malaysia Economic Growth Slows In Q1
May 13 2020 - 4:28AM
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Malaysia's economic growth eased sharply in the first quarter as
measures taken to contain the spread of the coronavirus, or
Covid-19, pandemic weighed on exports and domestic growth, data
from Bank Negara Malaysia showed Wednesday.
Gross domestic product grew 0.7 percent on a yearly basis, much
slower than the 3.6 percent rise in the fourth quarter of 2019 but
confounding expectations for a decline of 1.5 percent.
On a quarter-on-quarter basis, the economy shrank 2.0 percent in
the first quarter after rising 0.6 percent in the preceding
period.
The expenditure-side breakdown showed that household spending
growth eased to 6.7 percent, while government spending growth
improved to 5 percent. Gross fixed capital formation fell 4.6
percent.
Exports and imports were down 7.1 percent and 2.5 percent,
respectively.
The economy is forecast to contract in the second quarter but to
gradually improve in the second half of 2020 driven by fiscal and
monetary measures. A positive recovery is expected in 2021, in line
with global growth, the bank said.
Alex Holmes, an economist at Capital Economics, said GDP figures
were slightly better than expected but will provide little comfort,
with the economy set to contract much more sharply this quarter as
depressed domestic demand and an extremely weak external
environment weigh on activity.
The economy is set to see more pain ahead as broader control
measures to contain coronavirus will remain in place until June 9,
Prakash Sakpal, an ING economist said. This means a virtually
entire quarter of significantly sub-normal economic activity.
In the first quarter, headline inflation remained at a moderate
0.9 percent. Average headline inflation in 2020 is likely to turn
negative, due mainly to projections of substantially lower global
oil prices, the bank said.
Another report from the central bank showed that the current
account surplus increased to MYR 9.5 billion from MYR 7.5 billion
in the fourth quarter, driven by surplus in goods trade and the
smaller deficit in primary income.
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