Gross domestic product grew 0.7 per cent in the three months through March compared to a year earlier, according to Malaysia’s central bank. Thirteen of 21 economists surveyed by Bloomberg had forecast a contraction, with estimates ranging from -0.2 per cent to -4.2 per cent. Six saw growth expanding by as much as 1 per cent, while the remaining two expected no growth.
The economy contracted 2 per cent on a seasonally adjusted basis compared to the previous three months, the central bank said.
Movement restrictions imposed on March 18 cost Malaysia’s economy an estimated RM63 billion (S$20.6 billion), according to Prime Minister Muhyiddin Yassin, before they were relaxed on May 4. The country remains in a “conditional” lockdown until June 9 but most of the economy has gradually reopened, subject to social-distancing rules.
Authorities have moved to shore up the economy, with the central bank cutting the benchmark interest rate by a total of 100 basis points over three straight meetings to 2 per cent, and easing banks’ statutory reserve requirements. The government has announced RM260 billion in stimulus packages, with a focus on preventing job losses and ensuring small companies can continue to be viable.
The strain on the economy was apparent in Malaysia’s March data, with the jobless rate surging to the highest in a decade and private spending contracting for the first time since the data series began in 2013. Indexes of manufacturing, mining and electricity output all contracted as factories began closing or operating at minimal capacity.
Consumer prices declined in March for the first time in more than a year, dropping 0.2 per cent from a year earlier. That’s within the central bank’s estimate for inflation to average -1.5 per cent to 0.5 per cent this year on lower global oil and commodity prices.