PUTRAJAYA MAY 27: Malaysia’s Gross Domestic Products (GDP) declined marginally at 0.5 per cent in the first quarter of 2021 but continued its recovery from a contraction of 3.4 per cent in the preceding quarter.
Malaysian Chief Statistician, Datuk Seri Dr. Mohd. Uzir Mahidin said, the improvement was supported by the expansion in manufacturing sector and the rebound of agriculture sector.
He said, besides all economic sectors recorded better performance as compared to the last two quarters, Malaysia’s economy in this quarter gradually recovered as more economic activities were allowed to operate following Movement Control Order (MCO) 2.0, less stringent than the MCO 1.0 imposed in March 2020.
“Various stimulus packages introduced also steered the economic recovery and cushioned the potential economic losses of this country. Adding to this, encouraging economic environment during the first quarter of 2021 was largely driven by the better performance of key economic indicators in March 2021.
Mohd. Uzir added: “Accordingly, Malaysia’s current account balance (CAB) continued to record a surplus registering RM12.3 billion in the first quarter of 2021 as against RM18.6 billion in the previous quarter, contributed by the positive momentum of the net exports of goods.
“Foreign Direct Investment (FDI) recorded a higher inflow of RM9.1 billion compared to RM6.8 billion in the preceding quarter owing to higher inflow in equity and reinvestment of earnings and lower inflow in debt instruments.
“Concurrently, Direct Investment Abroad (DIA) by Malaysian companies has also increased, gaining from the reopening of the global economy, posted RM7.8 billion in the first quarter of 2021 from RM5.2 billion in the preceding quarter due to the high investment in equity abroad and retained earnings in this quarter,” Mohd. Uzir said in a statement here today.
Meanwhile, he said, Malaysia’s trade continued to rise, with total trade recording a double-digit increase of 14.8 per cent year-on-year. In line with this, Malaysia’s trade balance remained surplus at RM58.6 billion. During the same period, the Industrial Production Index (IPI) increased 3.9 per cent, supported by a strong growth of the manufacturing index.
Mohd. Uzir added, services sector which is the largest contributor to the national economy however remained affected with the revenue and volume index declined, albeit at a slower pace than the previous quarter.
In the first quarter of 2021, the CPI increased 0.5 per cent to 122.5 following increases in index of food & non-alcoholic beverages (1.5%) and miscellaneous goods & services (1.5%). The PPI local production also rose 3.0 per cent to 108.5 due to the higher indices of agriculture, forestry & fishing (32.6%), manufacturing (1.6%) and water supply (0.4%). In the meantime, the mining and electricity & gas supply indices both recorded a decline of 7.3 per cent and 1.7 per cent respectively.
In terms of labour market, he said, amidst targeted measures to manage the COVID19 pandemic in the country, uneven recovery momentum in the labour market was observed as the number of employed persons decreased slightly year-on-year by 0.04 per cent to 15.24 million persons while the unemployment rate remained high registering 4.8 per cent in the first quarter of 2021.
From a view point of labour demand, the number of jobs in economic sector decreased marginally as filled jobs declined while vacancies posted a small increase. The labour market remains in a challenging situation as it has not returned to the way it was during pre-COVID times.
Mohd Uzir added, based on the performance of several key economic indicators, the economy is expected to further improve in the second quarter of 2021 especially on the back of a low base as the economy contracted 17.1 per cent in the second quarter of 2020.
However, the recovery is also highly dependent on the extent to which the infection of COVID-19 could be brought under control and the consequence of MCO 3.0 with tightened Standard Operating Procedures (SOP) for the economic sectors and social aspects.
Further to this, Mohd. Uzir said, the Leading Index (LI) for March 2021 chalked up strong growth at 17.3 per cent, particularly due to the low base effect of March 2020 following a nationwide lockdown and the better performance of LI components.
“Taken together the performance of LI and the current state of COVID-19 outbreak, it is seen that the near term economic prospect is encouraging but prevailing challenges persist,” Mohd. Uzir said.-Malaysia World News
