• GDP strengthened to 5.0% yoy and rose 3.9% qoq sa in 1Q22

• Higher consumption and investment activities supported domestic demand

• All sectors recorded positive growth in 1Q22 except mining and construction

• 1Q22 current account surplus declined to 9-year low

• FDI remained on uptrend, up by RM24.4bn

• Recovery in growth momentum to continue but risks to growth prospects remain

Malaysian economy expanded by 5.0% in 1Q22, up from a 3.6% growth in 4Q21. While exports helped, the key factor in the outperformance was the recovery in the domestic consumption, bolstered by labour market normalization. The economic performance was also measured on a monthly basis, where GDP in January rose by 4.3%, February accelerated to 5.2%, and March expanded to a positive 5.4%. On a quarter-on-quarter seasonally adjusted, GDP increased by 3.9% (4Q21: +4.6%; 3Q21: -2.7%; 2Q21: -0.8%; 1Q21: +2.4%).

The GDP had gained in 1Q22 due to sustained opening the economy and gradual removal of pandemic-related measures, which bolstered the domestic activities and domestic demand. Domestic demand recorded two consecutive quarters of gains as all components except public investment posted positive growth. On the supply side, all sectors gained traction in 1Q22 as shown by the growth in manufacturing, services, and agriculture sectors as well as smaller contraction in construction as increased output had lifted the overall performance during the quarter. However, mining sectors contracted further caused by production disruptions.

Source: BIMB Securities Research - 17 May 2022