Malaysia GDP lower contraction in 2nd quarter

Malaysia’s economy contracted at a slower pace of 3.9% for the second quarter ended June 30 (Q2) compared to a year ago as the effects of the fiscal measures totalling RM67bil by the Government begin to kick in.

Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said at a media briefing Wednesday that the country’s gross domestic product (GDP) contracted 3.9% compared to a contraction of 6.2% in Q1. Economists in a Bloomberg survey expected a 5% contraction.
Zeti said the slower pace of contraction was due to higher public spending and positive growth in private consumption.

However, she said growth continued to be affected by weak external demand, which saw a drop of 26.3% following a fall of 20% in Q1 on weaker demand for manufactured goods from major trading partners and exports contracting significantly by 40.6%.

“We expect Q3 to show further improvement as the pace of decline slows and we expect Q4 to show positive growth,” Zeti said, adding that data pointed to a stabilising economic environment going forward.