The contraction again haunted the Malaysian economy in the third quarter after being affected by the implementation of sanctions to curb the spread of coronavirus outbreaks.
Most recently, Bank Negara Malaysia (BNM) reported that Gross Domestic Product (GDP) in the three months ended September, contracted 4.5% from the previous year.
This reading is far off the expectations from a Reuters survey of economists of a contraction of 1.3%.
Even so, BNM said GDP growth in the fourth quarter would recover quickly as the country had come out of tight sanctions and there were indications that suggested more positive momentum.
BNM Governor Nor Shamsiah Mohd Yunus said the growth prospects still depended on Covid-19 risk factors at the global and domestic levels, stability in global financial markets and the gradual easing of supply chain disruptions.
According to BNM, the Malaysian economy had recovered from the pandemic slump in the second quarter, but the resurgence of the Covid-19 case and the re-imposition of movement restrictions have affected consumption and investment activities.
In August, the central bank reduced its GDP forecast for the year to 3% from the 4% set initially.
