Malaysia’s GDP at -2.7% in 3Q20 – DOSM

by BERNAMA / pic by BERNAMA

MALAYSIA’S gross domestic product (GDP) decreased at a slower pace of -2.7 per cent in the third quarter of 2020 (3Q20) from the 17.1 per cent contraction in the second quarter of 2020, said the Department of Statistics Malaysia (DOSM).

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the economic performance in 3Q20 was uplifted by a rebound in the performance of the manufacturing sector, while other sectors showed an improved negative growth compared to the previous quarter.

“Overall, the performance in the third quarter was mainly driven by the manufacturing sector which grew 3.3 per cent compared to the 18.3 per cent decline in the previous quarter, supported by electrical, electronics and optical, as well as vegetable and animal oils and fats, and food processing products.

“The favourable performance was attributed by export-oriented industries which turnaround to 5.0 per cent from -13.5 per cent in the second quarter of 2020 and this was reflected in the performance of total exports in the month of September 2020 which recorded a positive double-digit growth,” he said in a statement today.

DOSM said a continuous recovery is seen in the country’s economic performance in 3Q20 amid the challenges to contain the spread of COVID-19 through various phases of the Movement Control Order (MCO) since June 10, 2020, with the reopening of economic activities and lifting of the ban on interstate travel.

As more economic sectors resumed, the unemployment rate slightly dropped to 4.7 per cent in this quarter compared to 5.1 per cent in the second quarter, it added.

The economic performance during the COVID-19 pandemic period was also measured on monthly basis where July lowered to negative 2.7 per cent, August contracted to negative 3.6 per cent while September improved to a smaller negative 1.6 per cent, it added.

On a quarter-on-quarter seasonally adjusted, GDP elevated to 18.2 per cent from -16.5 per cent in the second quarter of this year.

On sectoral basis, the agriculture sector slightly dropped 0.7 per cent due to a decrease in fishing and rubber sub-sectors, cushioned by other agriculture, oil palm and livestock sub-sectors.

Mohd Uzir highlighted that the services sector recorded a smaller -4.0 per cent, an improvement from -16.2 per cent in the second quarter of 2020, contributed by the better performance in finance and insurance, as well as information and communications sub-sectors.

He also noted that the unprecedented period caused by the pandemic has affected the efficiency of production capacity, whereby some industries had to bear fixed or higher expenses on inputs but experiencing a decline or slower outputs.

“This had caused an increase in the input-output ratio or production efficiency, which subsequently marginalising the value added. This is significantly experienced by the accommodation, restaurants, retail trade and recreational, as well as sports sub-sectors,” said Mohd Uzir.

The wholesale and retail trade sub-sector recorded a smaller contraction of 2.5 per cent, supported by the notable performance of the motor vehicles, which began to recover with a positive growth, in line with the exemption of sales tax for locally assembled car and lower tax for imported cars.

The construction sector fell 12.4 per cent due to the decline in all segments except for specialised construction activities as reflected by the returned to normal operating hours at the construction sites during recovery movement control order (RMCO), said DOSM.

For 3Q20, among the states, which performed better were Sarawak, Penang and Terengganu.

As for the demand segment, private final consumption expenditure posted a smaller decrease of 2.1 per cent from -18.5 per cent in the previous quarter, backed by the expenditure on the essential items such as food and non-alcoholic beverages; housing, water, electricity, gas and other fuels and communication.

Government final consumption expenditure expanded to 6.9 per cent from 2.3 per cent in the preceding quarter due to higher spending in supplies and services.

In 3Q20, exports of goods and services decreased at a slower pace at -4.7 per cent from -21.7 per cent in the second quarter of this year, mainly supported by recovery in goods.