Vehicles move on a road in Kuala Lumpur capital of Malaysia (Photo: Xinhua/VNA)Kuala Lumpur (VNA) – Malaysia’s economy should see aless severe slump in the first quarter of 2021 than it did in the previousthree months, on the back of resilient manufacturing activity and growingexternal demand, Reuters reported.
The Southeast Asian country's economy is seen contracting 1.9 percentin the period of January to March, an improvement on a 3.4 percent contractionrecorded in the fourth quarter of last year, according to the median estimateof a Reuters poll of 11 economists.
Malaysia’s economy was propped up by robust growth in themanufacturing sector and sustained oil production, but lockdowns imposed tocontain spiking coronavirus cases over the quarter will have hurt consumption,according to Alex Holmes, Asia economist for Capital Economics.
The outlook has deteriorated again in recent weeks, with arebound in cases leading to the re-imposition of restrictions, Holmes said in aresearch note.
The risks to Capital Economics’ annual forecast to growth of6.5 percent are now weighted firmly to the downside, he added.
Shipments surged in March by 31 percent year-on-year, theseventh-straight month of growing demand for Malaysia’s exports.
Malaysia’s central bank expects the economy to rebound thisyear with growth of between 6 percent to 7.5 percent. GDP shrank 5.6 percent in2020 - its worst annual performance since the 2008 Asian Financial Crisis.
But this week, the government imposed movement restrictionsin capital city Kuala Lumpur and most parts of surrounding Selangor state,Malaysia’s richest region, to deal with a fresh surge in COVID-19 cases.
The “disappointingly slow” pace of the government’scoronavirus vaccine rollout will likely crimp growth, Barclays economist BrianTan said.
The Malaysian government has set a target to vaccinate 80percent of Malaysia’s 32 million population in December. Nearly 992,000 peoplehad received at least one vaccine dose as of May 5./.
