Daily Times

The Malaysian economy grew 16.1 percent year on year in the second quarter of 2021, due to the low base from the significant decline in activity during the second quarter in the previous year when movement restriction was first imposed in the country, the central bank said on Friday.

However, owing to the re-imposition of nationwide containment measures, the central bank has lowered Malaysia’s full-year GDP growth forecast this year to 3-4 percent, from the previous forecast of 6-7.5 percent, it said in a statement.

The economic performance in the second quarter was mainly supported by the improvement in domestic demand and continued robust exports performance, said the central bank. Economic activity picked up at the start of the second quarter, but slowed down thereafter, following the re-imposition of stricter containment measures nationwide, it added. According to the central bank, all economic sectors registered an improvement, particularly the manufacturing sector. On the expenditure side, it said, the growth was driven by higher private sector spending and strong trade activity.

However, on a quarter-on-quarter seasonally-adjusted basis, the economy registered a decline of two percent, weighed by the tighter containment measures.

The Central Bank’s Governor Shamsiah Mohd Yunus said, while the containment measures weighed on growth, greater adaptability to restrictions and ongoing policy support have partly mitigated the impact.

Emphasising the domestic immunisation program, she said, Malaysia’s growth recovery is expected to broadly resume in the later part of the second half of 2021 and improve going into 2022.