This was the title in an article in channelnewsasia.com, “Malaysia economy contracts 17.1% in 2nd quarter, worst slump since 1998 financial crisis” (yeah, you can click to read the article if you like). Briefly, it looks bad, really bad when it comes to the GDP of Malaysia for Q2 2020. When the economy is in lockdown, nothing happens and this was what happened. Private consumption suddenly just vanished into thin air beginning 18th March when the Movement Control Order started.
Is this the end for Malaysia, ONLY?
Well, to put things in perspective, Singapore’s GDP contracted by over 40% in Q2 2020. (click to read) Meanwhile the largest economy in the world, USA’s GDP for Q2 contracted by 30% in Q2 2020. (Click here to read) UK’s economy shrank by 20% in Q2 2020 due to COVID-19 effects. (click here to read) Now, for some good news. Malaysia’s largest trading partner, China’s GDP for Q2 2020 has returned into positive territory. It grew 3.2%. The reason why I have to mention what is happening in the world is because some Malaysians thought Malaysia is the only country in the world with a negative GDP growth…
Article in theedgemarkets.com With such an unexpected worst contraction versus forecasted Q2 GDP number, MIDF has revised downwards Malaysia’s gross domestic product from -2.1% to -4.8%. This was what MIDF said. It said that based on recent developments and indicators, the economy is set to improve but sentiments remain weak due to uncertainty over COVID-19 and these would be affecting growth moving forward; political situation, rising protectionism and geopolitical tensions. As the country’s border remained shut and there’s high unemployment, this will affect private consumption which is the biggest drive of the economy. MIDF said that the stimulus package and overnight policy rate (OPR) cuts would likely cushion some of these impacts. Do refer to the full article here. Article in theedgemarkets.com
What happens moving forward?
This was an article recently pointing a U-shaped recovery in ASEAN led by China. China will lead U-shaped recovery in ASEAN So, am I so confident that Malaysia’s economy will be on a recovery mode from now onwards? Let me share three things as a common Malaysian.
#1 is that it’s now much harder to find a parking spot in Mid Valley shopping mall and this started since few weeks ago.
#2 I was given a number 12 queuing spot when I was at Chillis in 1 Utama and
#3 All the sales galleries I went to in Rawang two weeks ago, all were doing well and a few told me to wait for the next upcoming launch because the current phase is sold out or down to the last 5 units.
If I could choose what’s coming up in Q3 GDP number, I will choose to see a better number than Q2 GDP 2020. I believe it should be happening. Oh yeah, in the mean time, continue to spend and help the SMEs in Malaysia yeah. All these would help to carry multiplier effects and that RM50 you spend may just have an effect of RM200 to the economy. Happy enjoying your favourite food and coffee (local coffee… local cafes) too.
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