KUALA LUMPUR, Feb 10 — Malaysia’s economy is projected to grow by 3.1 per cent year-on-year for the fourth quarter of 2021, a rebound from the 4.5 per cent decline during the September quarter following the Movement Control Order 3.0 implemented in late June last year.
In its gross domestic product (GDP) review today, Bank Islam said the 3.1 per cent growth for the last quarter of 2021 took into account the flash floods that had devastated the key states at the end of December 2021, which caused an estimated RM6.1 billion in overall losses.
“We are also maintaining our Malaysia’s full-year GDP growth target of 3.0 per cent in 2021, barring any unforeseen changes required following the fourth quarter of 2021 GDP data release on February 11, 2022,” the bank added.
It noted that most countries have recorded GDP growth during the fourth quarter in tandem with the economic recovery trajectory since the second half of 2021.
Among the regional peers, the Philippines posted the largest expansion rate, growing by 5.6 per cent in 2021 after logging in a 7.7 per cent growth in the final quarter of 2021, mainly attributable to the loosening pandemic-related restrictions which had supported business activities last year.
Bank Islam said Malaysia’s continuous double-digit growth in exports, which stood at 29.0 per cent in the fourth quarter and 15.9 per cent in the third quarter last year would be the main driver for the economy given the persistent recovery in global demand.
On the same note, Malaysia’s Industrial Production Index expanded by 6.9 per cent year-on-year in the fourth quarter compared with -1.1 per cent in the third quarter, and the increment was contributed by the positive performance in the manufacturing index and electricity index, suggesting a better prospect for manufacturers coming into 2022, it added.
The bank also noted brighter economic prospects in 2022 as a high vaccination rate together with booster shots administered would mean more lively economic activities this year.
The National Recovery Council has mooted the idea of opening the international borders in March which would benefit the tourism-related sectors.
However, downside risks remain as uncertainties over the impacts from the Omicron virus have become protracted with over 10,000 people being infected daily in Malaysia.
“This would pose a threat to domestic economic recovery as restriction measures could be reinstated. As such, we believe the recovery path will be very much dependent on how Malaysia is managing the Covid-19 infections.
“Apart from that, supply chain disruptions, geopolitical risks, as well as uncertainties over the domestic political environment are also expected to deter economic performance moving forward,” said Bank Islam.
— Bernama
