August 16, 2021

The National Economy Grows 16.1% - Can Market Confidence Recover?

 Today, Bank Negara Malaysia (BNM) has released a report on the development of the Malaysian economy, which reported that the Malaysian economy recorded an impressive growth in the second quarter of this year of 16.1%.

Bank Negara Malaysia (BNM) in a statement said economic performance was supported mainly by improving domestic demand and continued strong export performance. The Minister of Finance, Senator Tengku Datuk Seri Zafrul Tengku Abdul Aziz also informed a similar matter saying that the economy continues to be in the recovery phase.

The second quarter growth was achieved after a small contraction of 0.5% recorded during the first quarter. For the second half of 2021, Malaysia's GDP increased by 7.1% compared to the decline in the same period for 2020 which contracted by 8.4%.

On the other hand, the chief economist of Bank Islam, Dr Mohd Afzanizam Abdul Rashid thinks that the GDP for the second quarter of 2021 is still below the level of the second quarter of 2019. If compared to the second quarter of 2019, GDP still recorded a contraction of 3.9%.

Thus, Afzanizam stated that for the economic recovery to continue, the reopening of the economy must be accelerated. At the same time it also depends on the vaccination program.

The analogy should be noted that the economic development of 16.1% is based on the calculation of GDP from year to year. This economic development is also after the contraction in the second quarter of 2020 which was 17.1%

At the same time, Bank Negara Malaysia has lowered its GDP forecast to 3%-4% from a range of 6% -7%. However, the central bank says the recovery is expected to pick up faster in 2022, helped by the gradual normalization of economic activity. -gradability and positive overflow from continued growth in external demand.