Malaysia’s economy contracts 5.6% in 2020, worst since Asian Financial Crisis

Kuala Lumpur witnessed numerous lockdowns amid the pandemic

Malaysia’s economy contracted 5.6 per cent in 2020 as the Covid-19 pandemic took its toll on the nation which has imposed some of the strictest coronavirus restrictions in Southeast Asia.

According to the central bank Bank Negara Malaysia, the economy registered negative growth of 5.6 per cent in 2020 and 3.4 per cent in the fourth quarter of last year. The annual contraction was the worst performance since 1998 and below the government’s projection of -3.5 to -5.5 per cent.

“The restrictions on mobility, especially on inter-district and inter-state travel, weighed on economic activity during the fourth quarter,” the central bank said.

Except for manufacturing, all economic sectors continued to record negative growth, according to the bank statement.

Inflation turns negative as fuel prices drop

For the fourth quarter, headline inflation declined to -1.5 per cent, in part reflecting the larger decline in retail fuel prices as compared to the corresponding period last year.

The local currency appreciated by 3.6 per cent against the US dollar during the fourth quarter of 2020, driven mainly by non-resident portfolio inflows as investors’ risk appetite continued to improve.

In its report, the bank expected that near-term growth in 2021 would be affected by the re-introduction of stricter containment measures. The impact, however, will be less severe than that experienced in 2020.

The government said it would gradually reopen the economy even as the country remains under a state of emergency, seeking a balance that will protect lives while ensuring that economic activity continues.

As of February 11, Malaysia recorded around 252,000 officially detected coronavirus infections, of which 198,000 recovered and 923 died.



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Kuala Lumpur witnessed numerous lockdowns amid the pandemic Malaysia's economy contracted 5.6 per cent in 2020 as the Covid-19 pandemic took its toll on the nation which has imposed some of the strictest coronavirus restrictions in Southeast Asia. According to the central bank Bank Negara Malaysia, the economy registered negative growth of 5.6 per cent in 2020 and 3.4 per cent in the fourth quarter of last year. The annual contraction was the worst performance since 1998 and below the government’s projection of -3.5 to -5.5 per cent. “The restrictions on mobility, especially on inter-district and inter-state travel, weighed on...

Kuala Lumpur witnessed numerous lockdowns amid the pandemic

Malaysia’s economy contracted 5.6 per cent in 2020 as the Covid-19 pandemic took its toll on the nation which has imposed some of the strictest coronavirus restrictions in Southeast Asia.

According to the central bank Bank Negara Malaysia, the economy registered negative growth of 5.6 per cent in 2020 and 3.4 per cent in the fourth quarter of last year. The annual contraction was the worst performance since 1998 and below the government’s projection of -3.5 to -5.5 per cent.

“The restrictions on mobility, especially on inter-district and inter-state travel, weighed on economic activity during the fourth quarter,” the central bank said.

Except for manufacturing, all economic sectors continued to record negative growth, according to the bank statement.

Inflation turns negative as fuel prices drop

For the fourth quarter, headline inflation declined to -1.5 per cent, in part reflecting the larger decline in retail fuel prices as compared to the corresponding period last year.

The local currency appreciated by 3.6 per cent against the US dollar during the fourth quarter of 2020, driven mainly by non-resident portfolio inflows as investors’ risk appetite continued to improve.

In its report, the bank expected that near-term growth in 2021 would be affected by the re-introduction of stricter containment measures. The impact, however, will be less severe than that experienced in 2020.

The government said it would gradually reopen the economy even as the country remains under a state of emergency, seeking a balance that will protect lives while ensuring that economic activity continues.

As of February 11, Malaysia recorded around 252,000 officially detected coronavirus infections, of which 198,000 recovered and 923 died.



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Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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Donation Total: $10.00

 

 

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