KUALA LUMPUR – Malaysia’s economy shrank by less than expected in the third quarter from a year earlier as consumers increased spending and businesses resumed activity after the government eased some coronavirus curbs, the central bank said on Friday.
The economy fell 2.7 per cent in the July-September period, by less than the 3.2 per cent fall forecast in a Reuters poll. Gross domestic product (GDP) dropped 17.1 per cent in the second quarter, marking the country’s first economic contraction since the 2009 global financial crisis.
The economy improved significantly in the third quarter as businesses and employment picked up, providing a boost for domestic spending and activity across most sectors, Bank Negara Malaysia said.
“Going into 2021, growth will rebound supported by a pick up in global demand and normalisation in domestic economic activities,” Bank Negara governor Nor Shamsiah Mohd Yunus said at a virtual news conference.
Private consumption fell at a slower pace of 2.6 per cent in the third quarter after seeing a 5.6 per cent decline in the previous three months, while gross exports jumped 4.4 per cent in the July-September period after shrinking by 15.1 per cent in the second quarter.
Malaysia saw its worst slump in over a decade in the second quarter, as strict movement curbs aimed at containing the coronavirus crippled private consumption and hurt business activity.
But the economy has since shown tentative signs of recovery driven by a pick-up in manufacturing and exports in the third quarter, as businesses resumed operations after the government began gradually easing some restrictions from May.
Monetary and fiscal stimulus has also helped cushion the blow, but analysts worry that the government’s move to reimpose coronavirus restrictions from October as cases surged could hurt the outlook.