Nurul Azlyna Mohamad Rasidi (CIFP, Bach. of Acc (Hons), CII), my guest writer, talks about 4Q19 GDP and notes that it is the lowest in the decade.
Her Report on 4Q19.
Malaysia’s economy grew 3.6% in the last quarter of 2019 (4Q19) in the recent announcement by Bank Negara Malaysia (BNM), making it the lowest quarter result since 3Q09. https://www.bnm.gov.my/
The weak quarter performance has dragged the overall Gross Domestic Products (GDP) for the year to 4.3% compared to 4.7% in 2018. The annual growth is far below the government’s projection of 4.7% for 2019. It is also at the lowest end of BNM’s forecast of 4.3% – 4.8%. https://www.bnm.gov.my/index.php?ch=statistic_nsdp
The underperformed growth was affected by lower output of palm oil, crude oil and natural gas, and a fall in exports amid the US-China trade war.
Oil palm production contracted due to the severe dry weather conditions and fertiliser cutbacks in early 2019 while natural gas production declined following temporary facility closures.
GDP, % Annual Change.
The outlook for Malaysia’s economy, particularly in 1Q20 is rather gloomy as Covid-19 outbreak is expected to softened domestic growth with the effects would largely be felt in tourism and manufacturing sectors due to air travel ban and factories closure in China. In tourism sector for example, Malaysia Association of Hotels (MOH) reported a total of 95,972 room cancellations resulting in a loss of revenue of over RM40 million as at early February of this year.
Nurul on 4Q19 GDP says given the lower GDP figure in the last quarter, it is unlikely to see a better record in 1Q20 due to ongoing Covid-19 outbreak. Thus, the government need to start introducing alternative strategies including stimulus package to make the market exciting again.