Tuesday, 19 October 2021

Malaysia faces economic headwinds as GDP growth flops in Q2

KOULAM PUR: Malaysia cut its full-year growth forecast and reported much slower second-quarter expansion on Friday, as the country reviews mega projects and tackles a massive debt left by the previous government.

Weaker growth figures were expected, analysts say, due to global uncertainties and questions raised by Mahathir Mohamad’s stunning election win in May that ended six-decade-long single party rule in Southeast Asia’s third-largest economy.

Slower growth also signals the economic risks facing the 93-year-old Mahathir, who was premier from 1981 to 2003 and now has been back in the job for 100 days.

Annual expansion in the second quarter fell to 4.5 per cent, well below January-March’s 5.4 per cent and a Reuters poll forecast for 5.2 per cent.

Bank Negara Malaysia (BNM), the central bank, blamed the fall partly on commodity production “shocks”.

The second quarter had the slowest growth since October-December 2016.

Mining contracted “due mainly to unplanned supply outages, while the agriculture sector was affected by production constraints and adverse weather conditions,” BNM said.

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