Growth Contraction And Lagging Demand Bogs Down Economy

Fitch Ratings says Malaysia’s economy is to remain stagnant with real GDP growth figures showing a contraction of 2.0 per cent quarter-on-quarter and domestic demand outlook darkening considerably.

Fitch Solutions have revised our real GDP forecast to 0% in 2021 from 4.9% previously following the release of the Q221 real GDP growth figure showing a contraction of 2.0% q-o-q. 

Furthermore the domestic demand outlook has darkened considerably, and Fitch now expects private consumption to do worse than in 2020, while investment will likely only show a marginal improvement.


Real GDP expanded by 16.1% y-o-y in Q221, which appears strong but the true picture of the economy is told by the -2.0% q-o-q growth rate, the result of the increasing stringent lockdowns that were implemented in Q221, culminating in the nationwide ‘total lockdown’.

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