KUALA LUMPUR – Malaysia’s economy contracted 3.4% in the fourth quarter of 2020, leading to a 5.6% decline in pandemics for the full year, the central bank announced Thursday.
The fall in October-December marked the third consecutive quarterly shortening and clarified the extent of the impact of COVID-19 on the Southeast Asian country. The result was worse than the median forecast of a 3.1% fall in Q4, as expected in the Reuters poll of 12 economists.
The full-year figure is the weakest in Malaysia since a 7.4% decline in 1998 due to the Asian financial crisis. In 2019, Malaysia’s GDP had expanded 4.3%, growing 3.6% in the last quarter.
The economy declined 17.1% in the second quarter of 2020 due to coronary side effects, before declining 2.7% in the third quarter as regulations were reduced. But a resurgence of the virus late in the year slowed the decline.
All economic sectors, except manufacturing, will decline in the fourth quarter as a result of controlled private spending and weaker public investment, the central bank said.
Gov. Nor Shamsiah Yunus expressed a level of optimism for 2021 despite a new nationwide shutdown imposed in January to prevent disease.
“We expect Malaysia’s economy to recover in 2021 with the development in global demand, with the rollout of vaccines boosting consumer and business attitudes,” she said.
“The imposition of movement control from January will put pressure on growth,” she admitted, but said the effects would be “as severe” as last year’s first lockout.
However, there are major concerns for the small, medium and midsize enterprises that underpin the economy. Unemployment has also jumped since the first restrictions began in March last year.
In November, the unemployment rate stood at 4.8%, with 764,400 people out of work, according to the Department of Statistics.
“Particular focus is needed on the labor market,” Nor warned, “as unemployment has reached 4.8% in the fourth quarter and the bank expects the labor market to remain weak through the first quarter. half of 2021. “