KUALA LUMPUR: Malaysia’s gross domestic product (GDP) is expected to shrink 2.1 per cent in the first quarter (Q1) of 2021 amid the second Movement Control Order (MCO), said RAM Rating Services Bhd.
RAM said the fourth consecutive quarter of contraction would likely be less pronounced than the preceding quarters’
“This is because most economic activities had been allowed to continue despite social restrictions, while strong external demand boosted industrial output during the quarter,” the firm said in a statement last Friday.
It added that the government’s various income-supporting policies were also seen to have somewhat mitigated the fall in consumption.
“We envisage the manufacturing sector as the main growth driver in Q1 2021, with a 6.8 per cent expansion. This sector’s operational capacity, as indicated by the Industrial Production Index, continued to climb during the quarter. Buoyed by the recovery of external demand, overall exports surged 31 per cent in March,” RAM said.
Data indicated that the deterioration of retail trade, one of the hardest-hit sectors, was much less severe than during MCO 1.0 in April 2020, it said. This helped to contain the downward pressure on growth in Q1 of 2021 Read more