(Bloomberg) — Malaysia’s economy returned to contraction in the third quarter, the first Southeast Asian economy to report a renewed slump, amid a protracted lockdown and a spike in Covid cases.
Gross domestic product in the three months ended September shrank 4.5% from a year earlier, Malaysia’s central bank said Friday, worse than the 2.6% drop predicted by analysts in a Bloomberg survey. Compared to the previous three months, GDP fell 3.6% on a seasonally adjusted basis.
The slowdown was seen across all segments of the economy, Nor Shamsiah Yunus, governor of Bank Negara Malaysia, said in a virtual briefing, adding that monetary policy will remain accommodative to provide support and ensure price pressures are manageable.
Despite last quarter’s slump, the central bank reaffirmed the government’s outlook for economic growth this year at 3%-4%, with headline inflation at 2%-3%. It also reiterated the official 2022 outlook for GDP to expand 5.5%-6.5%.
“Progressive lifting of containment measures and continued improvements in the labor market will be key to support the recovery going forward,” Shamsiah said, adding that growth will improve in the fourth quarter.
The outlook comes days after Malaysia opened a vaccinated travel lane with Singapore, its first such initiative, and agreed to begin a travel corridor with Indonesia early next year. Malaysia’s rapidly widening vaccine coverage has allowed the local economy to reopen in recent months, with all but two states in the final phase of the government’s national recovery plan.
The nation is also set to reopen the tourist haven of Langkawi islands to overseas visitors on Monday under a pilot project. The government will evaluate the project before emulating it in other tourist spots in the country, Prime Minister Ismail Sabri Yaakob said last month.
The government in October unveiled a record $80 billion spending plan for next year as it seeks to spur the long-delayed economic rebound, and allocated 23 billion ringgit for Covid stimulus measures alone.
The central bank last week maintained its benchmark policy rate at a record low of 1.75%, supporting a nascent economic recovery as virus curbs ease and inflation remains under control. Headline inflation is likely to remain moderate next year, Shamsiah said Friday, reiterating the bank’s comments last week, and added that the bank will be mindful of any premature withdrawal of monetary support.
Risks remain for the government’s growth outlook. Two upcoming state elections in Malacca and Sarawak could undo the recent drop in new Covid infections to the fewest since early June. The reproduction factor of the virus, known as R-naught, has climbed back to the key threshold of 1, and the government is monitoring hospital admissions and other leading indicators, Health Minister Khairy Jamaluddin said in a tweet on Friday.
The health ministry has issued fines as campaigning politicians violated virus protocols ahead of voting day on Nov. 20. A spike in cases after an election in Sabah state last year fueled public anger against former premier Muhyiddin Yassin, helping to precipitate the fall of his government in August.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
