Malaysia’s 2Q22 GDP growth higher than anticipated at 8.9%

By S BIRRUNTHA / Pic by TMR

THE Malaysian economy grew 8.9% year-on-year (YoY) in the second quarter of this year (2Q22), compared to an expansion of 5% in 1Q22. 

Bank Negara Malaysia (BNM) governor Tan Sri Nor Shamsiah said while the GDP was lifted to some extent by the low base from the Full Movement Control Order (FMCO) in June 2021, growth in April and May 2022 was particularly robust. 

“Domestic demand continued to strengthen, underpinned by the steady recovery in labour market conditions and ongoing policy support.  

“The higher growth was also reflective of normalising economic activity as the country moved towards endemicity and reopened international borders,” she said during the 2Q22 GDP announcement in Kuala Lumpur today. 

Nor Shamsiah added that exports remain supported by strong demand for electrical and electronics (E&E) products, while by sector, the services and manufacturing sectors continued to drive growth.  

She said during the quarter, headline and core inflation increased to 2.8% and 2.5%, respectively (1Q22: 2.2% and 1.7% respectively).  

“The higher core inflation reflected an improvement in demand conditions amid the high-cost environment, with price increases mainly driven by food away from home and other food items,” she said. 

Meanwhile, for the first half of 2022 (1H22), Malaysia’s GDP grew 6.9% YoY, according to the central bank. 

On a quarterly basis, the country’s economy grew 3.5% in 2Q22 from the preceding 1Q22. 

Nor Shamsiah noted that with growth in 1H22 at 6.9%, the Malaysian economy is projected to expand further for the remainder of the year. 

Looking ahead, the governor said while external demand could face headwinds from slower global growth, the Malaysian economy will continue to be supported by firm domestic demand. 

“Growth would also benefit from improving labour market conditions and higher tourist arrivals, as well as continued implementation of multi-year investment projects. 

“However, Malaysia’s growth remains susceptible to weaker-than-expected global growth, further escalation of geopolitical conflicts and worsening supply chain disruptions,” she added. 

Previously, Malaysia recorded a GDP growth of 16.1% for 2Q21, as the country was battling with Covid-19 pandemic and the imposition of lockdown.