PETALING JAYA: Malaysia’s gross domestic product (GDP) fell sharply to 0.7% for the first quarter of the year, the lowest seen since 3Q’09, when the GDP contracted 1.1%, according to a statement from the Department of Statistics Malaysia (DoSM).
Chief statistician Datuk Seri Mohd Uzir Mahidin said growth for the first quarter was supported by the services sector (3.1%) and manufacturing (1.5%), while the other sectors registered negative growth.
“Private final consumption expenditure in this quarter was on essential products such as food & non-alcoholic beverage, communication and housing, water, electricity & other fuels. However, household consumption reduced in petrol, travel, recreation and outside food consumption,” he said.
He also noted the lower expenditure by households has directly affected the industries related to food & beverage, accommodation, transportation, sport and recreations, due to the interconnection between the consumption and production of goods and services.
“Private final consumption expenditure moderated to 6.7% , from 8.1% in the fourth quarter last year. Gross fixed capital formation was -4.6% (Q4’19: -0.7%) due to the sharp decline in all three segments such as structure, machinery & equipment and other assets.
Losses in economic output for the quarter are estimated at RM22.8 billion.
As for Malaysia’s current account balance, it recorded a surplus of of RM9.5 billion in the first quarter, led by the surplus in goods account and the smaller deficit in Primary income whereby foreign companies in Malaysia earned lower income of RM16.3 billion as compared to RM25.1 billion in the previous quarter.
On the other hand, the services account registered a wider deficit at RM8 billion mainly caused by the drop in travel activities. Travel recorded a lower surplus of RM2.1 billion in the first quarter of 2020, the lowest since third quarter of 2003 due to the SARS epidemic.
“The financial account registered a higher net outflow of RM13.3 billion in the first quarter of 2020 as compared to RM100 million in previous quarter. This was primarily contributed by higher outflow in Portfolio investment due to redemption upon maturity and selling off debt securities by non-residents,” Mohd Uzir said.
Foreign direct investment (FDI) expanded to RM6.4 billion from RM5.4 billion in the previous quarter, mainly from USA, Singapore and Ireland. At the same time, direct investments abroad also increased to RM3 billion this quarter, from RM1.1 billion in the fourth quarter of 2019, to the UK, Indonesia and Canada
Malaysia’s international investment position (IIP) recorded net assets position of RM27.1 billion after registering nine consecutive quarters of net liabilities.
Looking ahead, Mohd Uzir said the leading index (LI) for the reference month of February 2020 expects Malaysia will experience a slower economic growth in the second quarter following the Covid-19 pandemic, supported by the downward movement under the long-term trend of LI beginning from the reference month of December 2019.
