Six states are largest contributors to GDP, despite higher contraction

by SHAHEERA AZNAM SHAH

Six states – Selangor, Kuala Lumpur, Johor, Sarawak, Penang and Sabah, have remained as the largest contributors to the national GDP with a total contribution of 72.1%, despite having suffered contractions last year.

Selangor recorded the highest contraction for the gross domestic product (GDP) at the state level last year due to the Covid-19 impact with a decline of RM18.3 billion, said Department of Statistics Malaysia chief statistician Datuk Seri Dr Mohd Uzir Mahidin.

Mohd Uzir said that other states that also saw big contraction included Kuala Lumpur with RM17.5 billion, Sarawak with RM9.6 billion and Sabah with RM8.1 billion.

He added the total contraction of the four states contributed 66.7% to the national reduction value in 2020.

“Economic performance of all states including the federal territories recorded negative growth in 2020.

“Malaysia’s economic growth in 2020 was the second lowest after the financial crisis in 1998 as the national GDP contracted by 5.6% compared to a growth of 4.4% in the preceding year.

“Various phases of Movement Control Order (MCO) starting on March 18, 2020 have been enforced to curb the spread of the coronavirus which caused the temporary closures of certain economic sectors and reduced operating hours,” he said in a virtual briefing today.

However, Mohd Uzir said eight states were able to show growth which surpassed the 5.6% contraction in the national GDP.

“Various economic stimulus packages and initiatives have been announced by the government, including by the state governments, to assist business survivals, relieving business environmental pressures and accelerating the revival of the labour market.

“The different composition of economic activities has led to the distinctive characteristics in each state and carried different impacts on the economic growth,” he said.

In terms of GDP per capita, all thirteen states and two federal territories recorded a decline in 2020 as compared to 2019, Mohd Uzir.

“Seven states surpassed national GDP per capita value, Kuala Lumpur, Labuan, Penang, Selangor, Sarawak, Malacca and Negeri Sembilan,” he said.

On the economic prospects for 2021, Mohd Uzir said a recovery that is driven by health and economic priorities could be achieved by the resumption of business activities with stricter standard operating procedures (SOPs).

“Based on April 2021 Leading Index, Malaysia’s economic performance is anticipated as favourable if pandemic eases, in line with the strengthening of global demand when the relaxation of the economy was implemented in some countries.

On the other hand, people’s participation in the National COVID-19 Immunisation Programme is also expected to lift up the business confidence in the domestic production of goods and services as well as to attract foreign investors,” he said.