M’sia’s economy shrinks 5.6 per cent in 2020, contracted 3.4 per cent in 4Q 2020

A graphic showing the economic performance of Malaysia in 2020. Source: Bank Negara Malaysia.

By Adrian Lim

KUALA LUMPUR, Feb 11: Malaysia’s economy registered a negative growth of 5.6 per cent in 2020.

Bank Negara Malaysia (BNM) in a press statement today said the economy also registered a contraction of 3.4 per cent in the final quarter of last year due to the imposition of the Conditional Movement Control Order (CMCO) on a number of states since October 2020.

The central bank added the restrictions on mobility, especially on inter-district and inter-state travel, weighed on economic activity during the fourth quarter of 2020.

In spite of that, it noted the continued improvement in external demand provided support to economic growth, in particular, the manufacturing sector.

For 2021, the central bank projected that the economic growth will improve from the second quarter onwards.

“The improvement will be driven by the recovery in global demand, where the International Monetary Fund (IMF) has revised upwards its 2021 global growth forecast by 0.3 percentage points to 5.5 per cent.

“Growth will also be supported by a turnaround in public and private sector expenditure amid continued support from policy measures including the National Economic Recovery Plan (Penjana), Prihatin Supplementary Initiative Package (Kita Prihatin), 2021 Budget, the Malaysian Economic and Rakyat’s Protection Assistance Package (Permai), and higher production from existing and new facilities in the manufacturing and mining sectors.

“The vaccine roll-out which will commence this month is also expected to lift sentiments,” it said. —DayakDaily