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KUALA LUMPUR, Feb 9 -- AmBank Research expects Malaysia’s gross domestic product (GDP) to be around -5.5 per cent in 2020 from 4.3 per cent in 2019 due to the weak economic indicators resulting from the COVID-19 pandemic crisis.
It also estimated Malaysia’s GDP to likely hover between -3.2 per cent and -3.5 per cent in the fourth quarter of 2020 (Q4 2020) due to weaker industrial production (IP) and exports as well as the high unemployment rate during the quarter.
For Q4 2020, Malaysia’s IP and exports stood at -0.3 per cent and 5.2 per cent, respectively, while unemployment settled at 4.8 per cent.
“It (Q4 2020 GDP) is expected to be weaker than the -2.7 per cent reported in Q3 2020, partly caused by selective restrictive measures imposed in Q4 when the number of new COVID-19 cases picked up,” said AmBank Research in a note today.
It added that the IP’s performance was mixed throughout 2020, with the data showing six months of negative annual growth -- mainly due to the impact from the COVID-19 pandemic and the restrictive measures taken to contain the virus spread such as the lockdown.
“Such restrictive measures resulted in disruptions to the global supply chain, demand and employment. On that note, for the full year of 2020, IP contracted by 4.2 per cent year-on-year (y-o-y).
“Manufacturing activities continued to support the overall IP Index, growing by 4.1 y-o-y in December, bringing the Q4 2020 average to 2.8 per cent y-o-y.
“Improving external trade and a gradual pickup in some areas of domestic activities supported the manufacturing activities,” said AmBank Research.
It added that the increasing focus on vaccine deployment boosted consumer and business’ confidence, but the upside to the IP was limited from the continuous drag in the mining output as well as the second consecutive month of decline in electricity production.
Meanwhile, the restrictive measures in Q4 2020 resulted in the number of unemployed people rising to 772,900, compared to 737,500 at end-Q3 2020.
“This remains a cause of concern, although 22,300 jobs were created in Q4 2020 from 202,900 in Q3 2020,” said AmBank Research.
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