Malaysia’s GDP grows 3.6% in 4Q19, lowest since global financial crisis

By NG MIN SHEN & ASILA JALIL / pic by MUHD AMIN NAHARUL

Malaysia’s GDP grew 3.6% in the fourth-quarter of 2019 (4Q19), as a result of supply disruption in the agriculture and mining sectors.

Private consumption grew 8.1% during the quarter (3Q19: 7%), while private investment rose 4.2% (3Q19: 0.3%), according to Bank Negara Malaysia (BNM) data released today.

“Overall, the Malaysian economy grew by 4.3% in 2019. Growth was affected by the challenging external environment, disruptions in commodity-related sectors and contraction in public investment activity,”BNM governor Datuk Nor Shamsiah Mohd Yunus told a press briefing in Kuala Lumpur today.

“Nonetheless, overall growth was supported by resilient private sector spending and continued spending in manfacturing and services sectors,” she added.

The full-year growth was within the central bank’s forecast – albeit at the lowest end of the range, as BNM had projected economic growth of between 4.3% to 4.8% for 2019.

Notably, the GDP figures for both 4Q19 and 2019 were the lowest for Malaysia since the 2008-2009 global financial crisis.

On the government’s proposed economic stimulus package to combat the impact of the coronavirus, Nor Shamsiah said the package seeks to assist the affected groups and better secure national growth.

“But the size of it, you need to balance the growth stimulus and fiscal cause. So all this will be taken into account when deciding the stimulus package,” she added.

Finance Minister Lim Guan Eng said Tuesday the stimulus package will be revealed by March.

Notwithstanding the government’s fiscal deficit target of 3.2% of GDP for 2020, there is still room for a stimulus package, Nor Shamsiah said.

She pointed out that current government debt stands at 52.8% of GDP, and about 61% of GDP if guarantees are included.

“If you look at the International Monetary Fund’s (IMF) recent report on Malaysia, (based on) their debt sustainability analysis – meaning at what level can the government afford debt – it’s at 70%.

So (with) the lower fiscal deficit, the fiscal consolidation exercise the government has embarked on, and still-manageable debt levels, it does provide the fiscal space to finance the stimulus package,” Nor Shamsiah added.

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