Malaysia's economic contraction slows to 0.5% despite Covid-19 surge
KUALA LUMPUR – Malaysia recorded its slowest economic contraction in a year, slipping 0.5 per cent compared to the first quarter of 2020 despite continuing to grapple with a persistent wave of Covid-19 infections.
The modest decline provides some hope of a rebound after gross domestic product (GDP) fell 5.6 per cent last year after three consecutive quarters of negative growth.
“All economic sectors registered an improvement,” said chief statistician Uzir Mahidin in a joint virtual press conference with the central bank on Tuesday (May 11).
Bank Negara Malaysia insisted Malaysia was on track to meet the official forecast of 6 to 7.5 per cent growth despite heading into a third Movement Control Order (the second this year) since the coronavirus pandemic hit in March 2020.
“What is encouraging in the Q1 performance is that despite MCO 2.0, the economy recorded better growth compared to Q4 2020,” said governor Nor Shamsiah Yunus.
However, she warned that “the balance of risks to the economic outlook continues to be tilted to the downside”.
These include an escalation of coronavirus cases both at home and abroad, volatility in commodity and financial markets, slow roll-out of major projects and the crucial Covid-19 vaccination.
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