Malaysia posts worst economic performance in more than two decades

Not since the Asian financial crisis of 1998 has the country experienced such a toll on its economy.
By: | August 14, 2020
Topics: Covid-19 | Job Cuts | Malaysia | News

Malaysia’s GDP fell by 17.1% in the second quarter of 2020, with sectors such as tourism, manufacturing and investment some of the worst hit by the COVID-19 pandemic.

According to Malaysia’s Department of Statistics, this represented the country’s worst performance since the height of the Asian financial crisis in 1998.

Nor Shamsiah Yunus, governor of the Malaysia Central Bank, cited the strict control and compliance measures during the Movement Control Order (MCO) as one of the key factors behind the economy’s sluggish performance.

Malaysia introduced the MCO on March 18, barring domestic and international travel and restricting the movement of people around the country.

In June, the MCO moved into a recovery phase, where all businesses were allowed to resume operations under stringent measures such as social distancing and the mandatory wearing of face masks. The recovery MCO is slated to end on August 31.

READ: Malaysia’s unemployment rate highest in over 30 years

Expressing “cautious optimism” that Malaysia is on the road to recovery, the Central Bank nevertheless expects the economy to contract between 3.5%-5.5% in 2020, before rebounding to between 5.5% and 8.8% in 2021.

Earlier this year, the Department of Statistics also reported that the unemployment rate hit 5.3% in Malaysia for the month of May, the highest figure recorded since 1989, when it hit 5.7%. In total, 826,100 people were reported to be unemployed in Malaysia in May.