Malaysia’s economy continues to recover
International Business News – The latest data released by Bank Negara Malaysia showed that the country’s gross domestic product grew by 8.9% in the second quarter of this year, and the economy grew by 6.9% in the first half of the year. The agency expects the Malaysian economy to maintain its recovery momentum in the second half of the year and achieve its full-year economic growth target of 5.3% to 6.3%.
Strong domestic consumption is the main driver of Malaysia’s economic recovery. The Malaysian assessment agency RAM recently released a report saying that the total retail sales of consumer goods in Malaysia has continued to grow since August last year, and the total retail sales in June this year increased by 44% year-on-year. The report believes that the country’s residents’ consumption activity has returned to pre-pandemic levels. Malaysian Finance Minister Zafrul said that the pent-up consumer demand during the epidemic was gradually released, and the rebound in domestic consumption far exceeded expectations.
Increased domestic demand led to a recovery in Malaysia’s services and manufacturing sectors. In June this year, the output value of Malaysia’s service industry increased by 12.1% year-on-year, and the industrial output value increased by 9.2% year-on-year. In addition, since April, Malaysia’s foreign trade has grown strongly. In June, the export volume reached a record 146.1 billion ringgit (about 225 billion yuan), a year-on-year increase of 39%; the import volume increased by 49.3% year-on-year. Services and manufacturing are the two pillars of the Malaysian economy, contributing more than 80% to the economy. The economic recovery has continued to improve the employment situation in Malaysia. The country added 26,000 jobs in the first quarter of this year. The national unemployment rate fell to 3.9% through June, the 14th straight month of declines.
Widespread Covid-19 vaccinations and faster economic growth have boosted the confidence of foreign investors. In August alone, Malaysia hosted 18 international business events, attracting more than 20,000 foreign investors. Alan Pryor, general manager of the Kuala Lumpur Convention Center in Malaysia, introduced that from August this year to early 2024, the convention center has arranged 127 international business events, most of which are investment fairs and exhibitions.
The Malaysian government is also making great efforts to develop the digital economy to inject new momentum into economic growth. Recently, the country established the Digital Initiative to accelerate the development of the digital economy through three major initiatives: promoting digital technology penetration, supporting the development of local technology enterprises, and attracting high-quality investment. The Malaysian Ministry of Communications and Multimedia has established the Malaysian Digital Coordinating Committee to implement and coordinate the digital initiative. According to a report jointly released by Google, Temasek and Bain & Company, Malaysia’s digital economy will reach US$21 billion in 2021, up 47% year-on-year, and is expected to grow to US$35 billion by 2025.
Investment research firm “Capitol Macro” recently predicted in a report that Malaysia’s economic growth may see a “moderate slowdown” in the coming months as commodity prices fall and the boost from the reopening of the border fades. The head of Bank Negara Malaysia, Nursiah, also believes that inflation, the unstable international economic environment and the shortage of foreign workers may have a negative impact on the Malaysian economy. “However, with solid domestic consumption and strong exports, the outlook for Malaysia’s economic recovery remains very bright.” Shanthia said.