Malaysia records negative growth for second consecutive quarter

Chief statistician Mohd Uzir Mahidin said the economic performance in 3Q20 was uplifted by a rebound in the manufacturing sector, while other sectors showed an improved negative growth compared to the previous quarter.

“Overall, the performance in the third quarter was mainly driven by the manufacturing sector which grew 3.3 per cent compared to the decline 18.3 per cent in the previous quarter, supported by electrical, electronics and optical, as well as vegetable and animal oils and fats, and food processing products.

“The favourable performance was attributed by exports-oriented industries which turnaround to 5.0 per cent from -13.5 per cent in the second quarter of 2020 and this was reflected in the performance of total exports in the month of September 2020 which recorded a positive double-digit growth,” Mohd Uzir said in a statement today.

Bank Negara Malaysia Governor Nor Shamsiah Mohd Yunus said the recovery in export performance was driven by E&E exports given the strong demand of work-from-home equipment and medical equipment, resulting in the current account on the balance of payment registering a higher surplus of RM56.1 billion or 7.1 percent of GDP during the quarter under review.

"However, the outlook is still subject to downside risk, whereby the resurgence of Covid-19 cases could impact the global growth, although the risk to economic growth due to the resurgence in cases is not expected to be as severe as observed in the 2Q," she said during the virtual 3Q GDP press conference today.

On the domestic front, Nor Shamsiah said the containment measures in affected states could post some challenges to economic growth and activities.

On sectors, the services industry recorded a contraction of -4.0 percent to the GDP against -16.2 percent in 2Q, while the mining sector registered -6.8 percent in 3Q from -20.0 percent in 2Q. For agriculture, it posted -0.7 percent in 3Q compared with a 1.0 percent growth in 2Q.

Nor Shamsiah also noted that the construction sector recorded -12.4 percent in 3Q against -44.5 percent in 2Q. However, the relaxation of construction activities and ongoing infrastructure projects would provide support for growth going forward.

The growth for next year will be driven by continuous stimulus measures announced in the National Economic Recovery Plan (Penjana) and Budget 2021, which includes tax allowances, investment incentives, and the implementation of various projects, as well as the National Digital Networking Plan (Jendela), a digital infrastructure plan to improve the digital connectivity in Malaysia.

- Bernama