• GDP contracted 0.5% yoy in 1Q21

• Domestic demand contraction narrowed in 1Q21

• Manufacturing and agricultural grew, while other sectors recorded narrower declines

• Lower current account surplus in 1Q21

• FDI posted a net inflow of RM9.1bn

• 2021 economic recovery on track but remains uneven

Malaysia economy's contraction narrowed to 0.5% in 1Q21 compared with the 3.4% contraction in 4Q20. The performance was mainly attributed to the substantial growth in external demand provided overall support to the growth and smaller contraction in domestic demand during the quarter. The economic performance during this pandemic period was also measured on a monthly basis where January contracted 3.5%, February slipped to negative 3.6%, while March rebounded strongly to a positive 6.0%. On a quarter-on-quarter seasonally adjusted, GDP rebounded to positive growth of 2.7% (4Q20: -1.5%).

The GDP contraction narrowed in 1Q21 as the impact of the second MCO mitigated by a sturdy recovery in both domestic and external demand. Domestic demand fell for the fourth straight quarter but at a softer pace amid stronger public consumption and private investments. On the supply side, the manufacturing sectors advanced further and posted higher growth than a quarter ago. Meanwhile, other sectors continued to underperform except the agricultural sector.

Source: BIMB Securities Research - 12 May 2021