Malaysia posts slowest growth since 2009 of 0.7 per cent but beats forecast of Q1 contraction

Defying expectations of a sharp contraction due to lockdown curbs, Q1 GDP grew by 0.7 per cent though Q2 could be worse

Malaysia is expected to be hard hit in the event of a global recession with its March unemployment rate the highest in a decade

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Staff on Kuala Lumpur’s light rail conduct temperature tests on passengers. Malaysia has been impacted by partial lockdown measures to curb the spread of coronavirus since March 18. Photo: Xinhua

Published: 1:17pm, 13 May 2020Updated: 10:52pm, 13 May 2020

Malaysia’s economy defied expectations of a sharp contraction and registered growth of 0.7 per cent in the first quarter, government data released on Wednesday showed.

However, it was the slowest pace of growth since 2009 and worse may lie ahead, as Malaysia is expected to be hard hit should the coronavirus pandemic lead to a global recession.

The 0.7 per cent growth outperformed the median forecast, from a poll of 12 economists by Reuters, of a 1.5 per cent contraction in the January-March quarter from a year earlier.

Bank Negara Malaysia, the central bank, said the economy contracted by 2.0 per cent on a seasonally adjusted basis compared to the previous quarter.

Customers at a wet market in downtown Kuala Lumpur. Photo: AP

Nonetheless, the central bank said moderation in growth came on the back of “measures taken both globally and domestically to contain the spread of the Covid-19 pandemic”. It said growth was impacted after the government on March 18 initiated partial lockdown measures – known locally as the Movement Control Order (MCO) – to curb the surging number of infections.

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