KUALA LUMPUR, Aug 14 (Bernama) — Malaysia's economy contracted 17.1 per cent in the second quarter of 2020, the worst double-digit quarterly decline since 1998 due to the unprecedented lockdown that was imposed to stem the spread of COVID-19 that brought the economy to almost a complete standstill.

In the fourth quarter of 1998, Malaysia posted a double-digit decline of 11.2 per cent. The second quarter of last year the country recorded a GDP of 4.9 per cent.

The services, manufacturing, mining and quarrying and construction sectors all dipped 16.2 per cent, 18.3 per cent, 20 per cent and 44.5 per cent, respectively in the quarter, Malaysia's Chief Statistician Datuk Seri Mohd Uzir Mahidin said today.

Agriculture sector, however, saw some respite with a growth of one per cent.

He said with a slim growth of 0.7 per cent in the first quarter of this year, the first-half GDP comes to -8.3 per cent as compared with 4.7 per cent in the first half of last year, he said at a press conference here, today.

Regionally, Singapore registered a decline of 12.6 per cent growth to the GDP followed by the Philippines which saw a contraction of 16.5 per cent, while Indonesia recorded a 5.3 per cent decline.

Also present was Bank Negara Governor, Datuk Nor Shamsiah Mohd Yunus.

Malaysia imposed a Movement Control Order (MCO) or a partial lockdown on March 18, 2020, where the economy was only operating at 45 per cent capacity. This was eventually eased to Conditional MCO on May 4 and Recovery MCO effective June 10 to Aug 31, 2020, where the economy gradually opened up.

Nor Shamsiah said the aggressive intervention by the government has enabled a faster recovery.

BNM, she said, has revised its 2020 GDP growth forecast to -3.5 to -5.5 per cent from -2 to 0.5 per cent previously, as the initial assumption was based on a lockdown period of only four weeks instead of seven weeks. 

The economy is expected to recover and post a growth of 5.5 per cent to 8 per cent in 2021.

The better growth outlook the second half of the year and 2021 is based on continued improvement in external conditions, gradual normalization in economic activities and labor market conditions, new investment projects, demand for technology and healthcare products and expansion in commodity-related production capacity.