Malaysia’s economic contraction quickened again in the fourth quarter, as a fresh virus wave late last year helped drive the economy to its worst annual showing since the Asian financial crisis.
GDP shrank 3.4 percent in the quarter from a year earlier, its third straight contraction and a deeper decline than the minus-3.1 percent figure analysts surveyed by Bloomberg were expecting.
The fourth-quarter figure compares with the third quarter’s revised 2.6 percent year-on-year contraction.
Photo: Reuters
The economy contracted 5.6 percent for all of last year, its worst performance since 1998 and below the government’s projection of minus-3.5 percent to minus-5.5 percent.
The data are “an undoubtedly downbeat print to end the year of 2020 on a challenging note,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp (華僑銀行) in Singapore. With difficulties continuing into the early part of this year, “the market would inadvertently see today’s GDP data as one big signal that Bank Negara Malaysia may have to ease in March rather than wait for any more ‘confirmatory’ data.”
Malaysian central bank Governor Nor Shamsiah Mohd Yunus said yesterday that monetary policy remains appropriate and accommodative after the bank cut its policy rate by 125 basis points last year to fight the recession. Still, the central bank has room to provide further support to the economy if needed, she added.
Malaysian stocks fluctuated after the data, with the benchmark index gaining 0.2 percent at the close at 12:30pm. The market was only open for a half-day Thursday ahead of the Lunar New Year holiday. The ringgit was unchanged at 4.0445 against the US dollar.
The worst may be over — at least for now — as Malaysia allowed the retail sector to resume operations on Wednesday, following a month-long lockdown that’s estimated to have cost the economy 700 million ringgit (US$173 million) a day.
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.
PANDEMIC
The loosened restrictions came into effect after health officials estimated daily virus cases peaked at the end of last month. The nation added 2,764 new cases on Tuesday — the smallest number since Jan. 11 — and Malaysian Director-General of Health Noor Hisham Abdullah said infections may show a downward trend by the time the lockdown is slated to end on Feb. 18. The tally rose to 3,288 cases on Wednesday.
The government last month unveiled a 15 billion ringgit package to help the economy weather the impact from the recent surge in COVID-19 cases. The plan, which includes cash support to the poor, tax breaks and wage subsidies, will be funded through a reallocation of existing funds and not via fresh spending.
However, this year is off to a slow start with most of the country under lockdown.
The governor declined to give a fresh estimate for this year’s GDP — which the central bank previously forecast at 6.5 percent-7.5 percent growth — saying it will be addressed next month.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS