Malaysia’s GDP Estimated to Have Contracted 2.1% in 1Q 2021 Amid MCO 2.0: RAM

RAM Rating Services (RAM) estimates Malaysia’s gross domestic product (GDP) to have contracted 2.1% in the first quarter of 2021 (1Q 2021) amid Movement Control Order (MCO) 2.0. Although this marks the fourth consecutive quarter of decline, the latest contraction is slightly lower than preceding quarters’ GDPs (4Q 2020: -3.4%; 3Q 2020: -2.7%).

Why it Matters?

The lower contraction is due to most economic activities given permission to continue in spite of social restrictions, with robust external demand boosting industrial output during 1Q 2021. In addition, the Government of Malaysia’s income-supporting policies have helped mitigate the contraction. RAM anticipates that the manufacturing sector was the main growth driver in 1Q 2021, with 6.8% growth (4Q...