Malaysia: Strong rebound in Q2 GDP – UOB

Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group review the latest GDP figures in Malaysia.

Key Takeaways

“Malaysia’s economy staged a double-digit growth rebound in 2Q21 by 16.1% y/y (1Q21: -0.5%), primarily aided by year-ago low base effects. The reading came in lower than our estimate (+17.5%) but above Bloomberg consensus (+14.1%). That being said, on a seasonally adjusted quarterly basis, real GDP reversed course and fell by 2.0% (1Q21: +2.7%).”

“Both the Jun and 2Q21 seasonally adjusted quarterly GDP contraction infer that the prolonged stricter lockdown will continue to weigh on the 3Q21 growth outlook. Fluid domestic political situations and growing concerns about a softer global growth momentum could also further impede Malaysia’s economic recovery pace in the near term, despite the national vaccination program making significant progress. Hence, we maintain our 2021 full-year GDP growth forecast at 4.0% (2020: -5.6%), which is at the upper bound of Bank Negara Malaysia’s (BNM) revised growth target of 3.0%-4.0% (from 6.0%-7.5% previously).”