• GDP contracted 2.7% in 3Q20
• All demand components recorded a significant recovery

• Improvements registered across major sectors led by manufacturing

• Current account recorded a higher surplus of RM26.1bn in 3Q20

• FDI recorded a net outflow of RM0.8bn

• Malaysia’s economy showed strength in 3Q but the resurgence of pandemic would dent the pace of recovery in 4Q

Malaysia’s economy contracted at a smaller pace of 2.7% in 3Q20 compared with the 17.1% plunge in 2Q20. The improved performance largely reflected the impact of the reopening of the economy after the Movement Control Order and better external demand conditions. The economic performance during this pandemic period was also measured on the monthly basis where July posted a lower decline 2.7%, August contracted to negative 3.6% while September improved to a smaller negative 1.6%. On a quarter-on-quarter seasonally adjusted, GDP rebounded to 18.2% (2Q20: -16.5%).

The economic performance in 3Q20 was reflected by the gradually reopening of economic and social activities with the Standard Operating Procedure (SOP) adherence as outlined by the Government for Recovery Movement Control Order (RMCO) to flatten the curve of COVID-19. On the supply side, the growth was uplifted by a rebounded performance of manufacturing sector while other sectors remained decreased in this quarter. On the demand side, the private consumption expenditure and gross fixed capital formation also registered smaller declined as compared to the growth in 2Q20.

Source: BIMB Securities Research - 16 Nov 2020