Malaysia: GDP growth disappointed in 2021 – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviews the latest GDP figures in the Malaysian economy.

Key Takeaways

“Real GDP rebounded by +3.6% y/y in 4Q21 (3Q21: -4.5%). This came in lower than our estimate (4.3%) but higher than Bloomberg consensus (3.3%). On a seasonally adjusted quarterly basis, real GDP rose by 6.6% q/q (3Q21: -3.6%). This brings full-year GDP growth to 3.1% in 2021 (2020: -5.6%), below our projection (3.3%) and Bloomberg consensus (3.4%).”

“4Q21’s GDP was lifted by improvements in the manufacturing (+9.1%), services (+3.2%), and agriculture (+2.8%) sectors. Meanwhile, construction (-12.2%) and mining (-0.9%) declined further. Higher private consumption (+3.7%) provided a fillip as the economy reopened across almost all states of Malaysia last quarter amid higher vaccination rates. Interstate travelling resumed in Dec 21 which helped revive domestic tourism. Investments contracted further while net trade grew.”

“We continue to expect a pick-up in growth to 5.5% in 2022 albeit the path will not be smooth as pandemic risks linger. External challenges also arise with heightened market volatility as global central banks embark on monetary policy normalisation. Our 2022 growth outlook is in line with official forecasts of 5.5%-6.5%, but lower than market consensus of 6.1% (based on Feb estimates).”