Veil of gloom lifting over Malaysian economy after Q3 slump

"IT'S always darkest before the dawn" may quite be the forward narrative following Malaysia's recently released devastating third quarter gross domestic product (GDP) showing.

A week ago, South-east Asia's fourth largest economy reported a worse-than-expected GDP contraction of 4.5 per cent year on year, as a result of a slowdown across all sectors; the deepest cut was seen in private consumption and investments. The macro shrinkage - a stark reminder of the pandemic's brutality as the country remained shackled by movement curbs to fight spiralling infections - is even more jarring when seen against the second quarter's 16.1 per cent growth on an annual basis.

While economists had pencilled in a forecast contraction of 2.3-2.6 per cent for the quarter, the final figures ought not to be a big shock. At the start of the quarter, Malaysia was already into 2 months of a gruelling nationwide lockdown. The movement control order (MCO), which limited business activity and travel, was extended in May and then again in June amid a third wave of Covid-19 cases in the community. Large parts of Selangor and certain areas in Kuala Lumpur - the country's economic powerhouses - saw tightened measures to stem the rising tide of Covid-19 community cases.