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Malaysian economy swings back to growth as pandemic curbs ease

KUALA LUMPUR (CNA) – Malaysia’s economy returned to growth in the fourth quarter of last year, as coronavirus curbs were lifted and economic activity resumed.

Gross domestic product rose 3.6 per cent in the October-December period, the central bank said yesterday, faster than the 3.3 per cent rise forecast in a Reuters poll and up from a 4.5 per cent decline in the previous quarter.

Malaysia’s full-year economic performance expanded 3.1 per cent in 2021, rebounding from the 5.6 per cent drop in 2020, the country’s worst annual performance since the 1998 Asian Financial Crisis.

The government said last year’s economic performance was still below pre-pandemic levels in 2019 but recovery was expected to continue in line with improved global and domestic demand. The central bank is projecting 2022 growth of between 5.5 per cent to 6.5 per cent.

Risks remain tilted to the downside, however, mainly due to COVID-19 developments, BNM Governor Nor Shamsiah Mohd Yunus told a news conference.

People wearing protective masks cross a street in front of Petronas Twin Towers in Kuala Lumpur, Malaysia. PHOTO: CNA

“The key areas emanate from the resurgences of severe and vaccine-resistant COVID-19 variants of concerns that could lead to renewed containment measures globally and domestically, which would disrupt the economic recovery,” she said.

Malaysia has seen a resurgence in COVID-19 cases in recent weeks amid a spike in infections caused by the highly transmissible Omicron variant of the coronavirus.

However, the government has vowed not to reimpose lockdowns amid a ramped-up COVID-19 inoculation programme. Nearly 80 per cent of the country’s 32 million population has received at least two doses of COVID-19 vaccine, while more than a third has received a booster.

Last month, the central bank left its key interest rate unchanged at a record low of 1.75 per cent to support continued recovery.

Nor Shamsiah said Malaysia’s headline inflation is expected to remain moderate this year and denied speculation that Malaysia was experiencing signs of hyperinflation or stagflation.

“This inflation outlook, however, is still subject to the latest global commodity price developments and risk from supply-related disruptions,” she said.


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