Sidang Akhbar Kedua Tahun 2021 - Bank Negara Malaysia
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Sidang Akhbar Prestasi Ekonomi Suku Kedua Tahun 2021 13 Ogos 2021
Continued improvement in global growth in 2Q 2021, with a dual track recovery
across countries
Real GDP Growth Composite PMI
Global Growth Developments
Annual change (%)
2Q21 1Q21
18.3 59.3 • Broad-based recovery of
services and manufacturing
14.7 activity in advanced
13.7
11.8 12.2 Advanced economies, supported by
Economies relaxation of containment
8.9
7.9 measures, amid high
7.1
5.9 vaccination rates
7.5
1.5 • Goods trade improved,
particularly regional exports
1.9 0.5
-0.7 -1.3 50.8
• Disruption of economic
Emerging Market
activities in many emerging
-3.9 Economies
market economies due to
Korea Indonesia Chinese China Philippines US Euro area Singapore Jan Feb Mar Apr May Jun containment measures
Taipei
2021
Source: CEIC, National authorities, IHS Markit
1Malaysia’s GDP grew by 16.1% in 2Q 2021
Stronger growth reflected low base from the significant decline in activity in 2Q 2020 Key Factors:
Real GDP Growth, % yoy Real GDP Growth (2021) Low base from the
significant decline in
Month % yoy
16.1 economic activity in
January -3.6 2Q 2020
4.7 5.0 4.5 February -3.6 Stronger external
3.7
0.7 demand
March 6.1
-0.5
Annual growth -2.7 -3.4
2020: -5.6% April 40.1 Improvement in domestic
2019: 4.4% demand
May 19.8
-17.2 weighed by…
1Q-19 2Q-19 3Q-19 4Q-19 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 2Q-21 June -4.4 Re-imposition of stricter
containment measures
On a seasonally adjusted quarter-on-quarter basis, GDP declined by 2% in 2Q 2021 in May and June
Source: Department of Statistics Malaysia
2Continued improvement in most economic sectors, led by manufacturing and services
Manufacturing Services Mining Construction Agriculture
GDP, Annual change (%) GDP, Annual change (%) GDP, Annual change (%) GDP, Annual change (%) GDP, Annual change (%)
26.6 13.4 40.3
13.9
0.2
6.6
-10.4 -1.5
-2.3 -5.0
1Q-21 2Q-21 1Q-21 2Q-21 1Q-21 2Q-21 1Q-21 2Q-21 1Q-21 2Q-21
Improved consumer-
Continued robust Weaker oil palm harvesting
related activities, Higher crude oil and Progress in large
external demand for activities amid labour
especially in natural gas production infrastructure works
E&E products shortages
April and May
Source: Department of Statistics Malaysia
3Updated
Growth was driven by higher private sector spending and strong trade activity
Private Consumption Private Investment Public Investment Public Consumption Net exports
GDP, Annual change (%) GDP, Annual change (%) GDP, Annual change (%) GDP, Annual change (%) GDP, Annual change (%)
17.4 9.0
11.6 34.3
12.0
5.9
1.3
-1.5 -18.6 0.8
1Q-21 2Q-21
1Q-21 2Q-21 1Q-21 2Q-21 1Q-21 2Q-21 1Q-21 2Q-21
Broad-based expansion Higher capital
Higher General
across both necessity expenditure particularly in Higher growth in Strong
Government capital
and discretionary the services and supplies and services external demand
spending
spending manufacturing sectors
Source: Department of Statistics Malaysia
4Updated
Current account of the balance of payments registered a higher surplus of RM14.4 billion or
3.9% of GDP
Goods Services Primary Income Secondary Income
Larger Goods Surplus
RM billon RM billon RM billon RM billon
• External demand
supporting exports
40.7
36.6
Marginally Larger
Services Deficit
• Larger deficits mainly in
transportation and other
-1.4 business services
-5.7 -3.6
-9.5
-15.0 -15.4
Larger Primary
Income Deficit
• Higher investment
1Q-21 2Q-21 1Q-21 2Q-21 1Q-21 2Q-21 1Q-21 2Q-21
income accrued to
foreign investors in
Malaysia
Source: Department of Statistics Malaysia
5Economic activity was weighed by tighter containment measures in the later part of 2Q 2021
Manufacturing activity was supported by strong external demand, Latest key indicators from the services sector, however, point
but the services sector was weighed by mobility restrictions to a tentative turnaround in July
IPI for Manufacturing IPI for Electricity IOWRT Total Transactions MY Google Community Mobility Report
per day Retail, Recreation
Workplace
& Grocery
RM billion Mobility Changes Compared to Baseline (% decline)
132.2 123.4 136.4
132.1 2.2
129.2 121.3
119.5
2.1 -6.6
129.8 127.2 118.7 129.9 127.4
126.8 -19.2
1.8 -21.0
114.8 -36.9
123.8 -26.7
122.4 1.7 -40.1
108.8 -48.9
105.1 -37.4
28 9 20 1 28 9 20 1
Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun Apr May Jun Jul
Mar May Jun Aug Mar May Jun Aug
Note: Google mobility data, averaged weekly as at 7 August 2021, is expressed as the percentage change from the 3 January 2020 to 6 February 2020 baseline. Data on total transactions per day, averaged monthly,
refers to online and physical spending.
Source: Department of Statistics Malaysia, Bank Negara Malaysia, Google Mobility Community Report
6Updated
Labour market showed improvement up till May-21, before deteriorating in June-21
Employment levels Jobless claims
Thousands of persons Thousands of persons
15,352 15,371
15,271
15,207 15,215 Tourism-related*
15,154 15,329 15,298
Non tourism-related
15,237 10.4
14,990 15,193 15,196
9.2
14,933
15,073
5.2 4.5
5.6 5.2
14,888 3.2 4.6 4.6 3.5 3.5 3.3
8.2 7.5 3.2 3.4
4.8 3.6 4.6 3.3 3.2 2.4
3.0 2.8 2.8 2.8 2.5 1.8 1.3 2.3
Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21
Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21
Unemployment rate Placement rates
Share of labour force (%) Number of new job placements for every 100 job losses 35 new job placements
5.3 for every 100 jobs lost
5.0
4.9 4.9 55
4.8 4.8 4.8 4.8
4.7 4.7 4.7 4.7 48
4.6 4.6 43
4.5 40 40
37 37 35
33
30
25
20
6 11
8
Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21
* Tourism-related industries include wholesale retail, administrative and support services,
accommodation and F&B, transportation and storage, entertainment and recreation
Source: Department of Statistics Malaysia
Source: Employment Insurance System, Social Security Organisation (SOCSO)
7Growth is expected to trough in 3Q 2021 before improving in 4Q 2021,
in line with strong external demand conditions and easing of containment measures
Key factors underpinning growth in 2H 2021
External factors
1 Strong global demand conditions, particularly in major trade partners
2 Continued global tech upcycle
Domestic factors
3 Rapid vaccination rate allowing the gradual relaxation of FMCO restrictions
4 Ongoing policy support for businesses and households
5 Continuation of large-scale infrastructure projects
8Updated
The strong global demand is expected to support the expansion of gross exports
Stronger gross export growth reflecting …underpinned by strong external …which will support employment in
broad-based expansion across products… demand conditions… export-oriented industries
Gross Exports Growth Real GDP growth of Malaysia’s Key Trade Partners Employment in export-oriented sectors1
% yoy % yoy
44.0
2020 2021f
8.1
2 million workers
7.0 Manufacturing sector
4.6
18.0
2.3
1.6 million workers
5.1 5.2 Services sector
-0.2
-3.5 0.8 million workers
-6.5 Commodities sector**
-14.9
PR China US EU
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 (16.2%* of Malaysia's (11.1%* of Malaysia's (9.6%* of Malaysia's
exports) exports) exports)
* Share of 2020 Malaysia’s exports 1 Bank Negara Malaysia estimates
Source: Department of Statistics Malaysia
Source: International Monetary Fund ** Includes agriculture and mining sectors
9Global tech upcycle to support E&E production and exports
Rising demand for semiconductors for … have benefitted Malaysia as a net Recent industrial engagements show
work-from-home & medical devices… exporter of semiconductors signs of continued positive outlook
Industry Forecasts for Global Semiconductor Sales E&E Industrial Production Index Findings from BNM Industrial Engagements
% yoy Index (2015 = 100), seasonally adjusted
153.5
2020 2021f
Full order books
throughout 2021
24.0 2019 Avg.: 125.9
19.7 Capacity expansion–
Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21
New plants & machinery
for industry 4.0
13.0 Global Semiconductor Trade Balance technologies
% of 2020 GDP
9.0 Introduction of new
6.8 4.7 4.3 2.6 products in fast-growing
segments
-0.1 -1.0 -1.6 E.g. data centres and
-7.4 medical devices
WSTS Semiconductor IC Insights Integrated Circuit
TW MY SG KR IN TH CN VN
Sales Sales
Source: World Semiconductor Trade Statistics, IC Insights, Department of Statistics Malaysia, International Trade Centre, Bank Negara Malaysia
10Domestically, rapid vaccination rates with easing demands on healthcare capacity
would lead to better economic outcomes
Fast vaccination rates and lower ICU utilisation will enable the swift easing of containment measures
ICU Utilisation and Vaccination Rate by State Principles in Assuming Phased Transition
160 Current ICU Current speed of
High
Size of bubble indicates % to GDP1
Assumed Transition Path
utilisation vaccination rate
140
Faster and earlier transition to
Low Fast
120 Phase 4
ICU Utilisation
100 As vaccination rate improves,
Low Slow transition to subsequent
%
80 MY avg ICU utilisation: 91% phases is shorter
60 1. Gradual transition to the
next phase as ICU utilisation
High Fast
40 stabilises and improves
20 2. As vaccination rate
MY avg adult vaccination
Low
rate: 1.2% per day progresses and ICU
0 utilisation improves,
High Slow
0.0 1.0 2.0 3.0 transition to subsequent
phases will be swift
2nd dose vaccination rate, % of state adult
Slow population per day Fast
1Refers to share to GDP in 2020
Note: ICU utilisation and vaccination rates refer to the 7-day average between 3 – 9 Aug 2021 In the baseline assumption, all states are expected to transition to
Source: COVID-19 Immunisation Task Force, Ministry of Health, Department of Statistics, Malaysia and Bank
Negara Malaysia
Phase 3 by October 2021 and Phase 4 by November 2021
11Greater adaptability to restrictions and ongoing policy support have partly mitigated
the impact of containment measures
Higher adoption of technology allow selected economic Policy support to alleviate some of the financial burden of
activity to continue households and businesses
1H 2020 1H 2021 Selected policy measures
Online banking1 8.9 +36% 12.1 Households ✓ Targeted Wage Subsidy Program
transaction volume billion billion
✓ Enhanced hiring incentives (PenjanaKerjaya) and
re-skilling and up-skilling initiatives
E-wallet2 247 +89% 468 For cash flow ✓ Various cash transfers (e.g. Bantuan Prihatin
transaction volume million million relief and Rakyat, Bantuan Khas COVID-19)
spending support
✓ Repayment assistance
Merchant registrations +57%
0.6 1.0
for QR payments million ✓ Various financing schemes
million Businesses
(e.g. Targeted Relief and Recovery Facility, High
As at end 2020 As at end 1H 2021 Tech Facility, Automation & Digitisation Facility,
various microcredit financing)
Merchants3 adopting +19k
490k 509k ✓ Tax incentive, relief and other cost reduction
e-commerce For cash flow
relief and measures
1 Online banking transactions includes 1) financial transaction such as funds transfer and bill payment; and 2) non- business
financial transactions including balance inquiries, statement request and loan applications ✓ Repayment assistance
2 Network-based e-money
continuity
3 Refers to Micro, Small & Medium Enterprises
Source: Bank Negara Malaysia, Malaysia Digital Economy Corporation, Ministry of Entrepreneur Development and Cooperatives
12Updated
Ramp-up in commodity production and continued investment activity
would also provide the lift to growth
Ramp-up in oil- and gas-related production Continued investment in large infrastructure projects
ECRL (2018-2027) LRT3 (2018-2024)
• RM50.0 billion • RM16.6 billion
Operationalisation of
MRT2 (2016-2022) Pan Borneo Highways
Natural PFLNG2 facility • RM30.5 billion (2016-2023)
gas • RM23.6 billion
LNG price :
2021f: RM1200 – RM1300 / tonne
(2020: RM1,230 / tonne)
Strategic initiatives catalysing the national digitalisation agenda
Restart of RAPID Malaysia Digital National E-Commerce
Refined operations in 4Q 2021 Economy Blueprint Strategic Roadmap 2.0
petroleum
Brent oil price :
2021f: USD 62 - 72 / barrel
(2020: USD43 / barrel)
Jalinan Digital Digital Investment
Negara Office
Source: Bank Negara Malaysia, Newsflows
13For 2021, Malaysia’s GDP is projected to grow between 3% and 4%
Malaysia’s Real GDP Growth
Growth will be weighed by containment
Annual change (%) measures, before recovering towards the
end of 2021
8
4.8
5
4.4 4.0
Strong recovery in export-oriented sectors
2 3.0
in tandem with improving global demand
-1
-4
Slow improvement in services sector,
-7 -5.6
particularly consumer and tourism-related
-10 activities
2018 2019 2020 2021f
Source: Department of Statistics Malaysia, Bank Negara Malaysia
14Near-term growth trajectory, however, is highly dependent on COVID-19 risk factors
Duration and stringency of
containment measures
Global vaccination progress 1 The state of firms’ operating capacity and
1 Highly contingent on vaccine uptake and consumer spending depends on FMCO
effectiveness restrictions
External Materialisation of health
Normalisation in global factors outcomes from vaccination
2
economic activity Effectiveness against new VOCs
2 Severe new variants of concern
(VOCs) could necessitate reimposition Domestic
of containment measures factors
Policy certainty
3 Uncertainties could affect the undertaking
of investment decisions
Supportive global financial
3 conditions
Continued bouts of volatility given Progress of infrastructure
COVID-19 uncertainties 4 projects
Implementation timeliness subject to
operating and resource constraints
15Uncertainty on evolution of the pandemic and the containment measures would affect
growth trajectory
Vaccine Rollout Containment Measures Other Factors
▲ Majority of total population to ▲ Faster transition to Phase 4 ▲ Faster improvement in the
Faster be vaccinated by end of by September 2021 labour market
October 2021
Recovery ▲ Higher pent-up demand
▲ Vaccines effective against among households
prevailing variants
▼ Majority of total population to ▼ Prolonged tight containment ▼ Policy uncertainty could
be vaccinated by 1Q 2022 measures with Phase 4 affect the progress of key
Slower starting in 2022 investment projects and
▼ Strain on the healthcare investor confidence
Recovery system due to new variants
▼ Slower recovery in the labour
market
16Updated
Growth is expected to accelerate in 2022
Further expansion in global growth and trade activity
Key driver for improvement in production activities
Improvement in consumer sentiment
Catalysed by an increasing share of vaccinated population, easing of containment measures,
and the buildup in total household savings in the past year
Strengthening of labour market recovery
Key factor underpinning private consumption
Expansion in commodity-related production capacity
(e.g. Ramp-up of RAPID production, commencement of SK320)
Faster progress in large infrastructure projects
(e.g. ECRL, LRT3, Pan-Borneo Highway and JENDELA)
Source: Bank Negara Malaysia
17Headline inflation recorded a temporary spike in 2Q 2021 and is expected to moderate in
subsequent quarters
As expected, headline inflation spiked in 2Q 2021, driven by
Headline Inflation is expected to average between 2.0% and
the transitory base effect from low fuel prices and lapse in
3.0% for the year, while core inflation will remain subdued
impact from electricity tariff rebates
Annual change in inflation and contribution to headline inflation Malaysia’s Headline Inflation
Annual change (%) / Annual change (%)
Contribution to headline inflation (ppt)
5 3.0
4.1
1.0 0.7
4 2.0
3
-1.2
2
2018 2019 2020 2021f
0.7 0.7
1
0.5
0
Headline inflation is expected to moderate in
-1
1 the near-term as base effects dissipate
1Q 2021 2Q 2021
Fuel (ppt) Price admin ex fuel (ppt) Core inflation (ppt) Core inflation would remain subdued
Price-volatile items (ppt) Headline Inflation (%) Core Inflation (%) 2 (0.5% – 1.5%) amid continued spare capacity in
the economy
1Coreinflation is computed by excluding price-volatile and price-administered items.
Source: Department of Statistics, Malaysia and Bank Negara Malaysia estimates
18Monetary policy remains accommodative
Overnight Policy Rate (OPR)
%
3.5
• OPR remains low at 1.75%
3.0
• Monetary policy (MP) in 2021 to remain
accommodative
2.5
- Provide support to the economy
- Ensure price pressures remain
2.0 manageable
• Amid pandemic uncertainty, MP will continue
1.5 Jul-21: 1.75
to be determined by new data and information
1.0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: Bank Negara Malaysia
19Domestic financial markets were affected by external and domestic factors
10-year MGS yields were broadly unchanged while equities
Marginal appreciation of the ringgit in line with the broad-
continued to decline amid the increase in domestic COVID-19
based weakness in the USD
cases
Movement of Exchange Rate against the US dollar Movement of 10-Year Sovereign Bond Yields
bps Malaysia Regional Average
70.3
1.6 80.0
1.5 1.1 61.9
20.0 1.5 -6.5
-2.1
-0.3 0.1 0.2 0.2 0.3 -40.0 -60.8 -18.6 -19.6
0.0 -66.2
-100.0
-0.3 2020 1Q21 2Q21 Since 1 July
-0.8
-1.5
-1.4 Movement of Equity Prices
-1.7
% Malaysia Regional Average
5 2.8 3.0
-3.0 2.4
-3.2
-1.1
1.8
-4.5 -4.1
THB PHP MYR SGD IDR KRW CNY -2.6 -2.3
-5 -3.3
2Q 21 Since 1 July* 2020 1Q21 2Q21 Since 1 July
*Change in exchange rate against the US dollar from 1 July to 9 August 2021 *Regional countries include Indonesia, the Philippines, China, Singapore, Korea and Thailand.
Source: Bank Negara Malaysia, Reuters YTD as at 9 August 2021.
Source: Bank Negara Malaysia, Bloomberg
20Net financing continued to expand during the quarter
Demand for household loans remained
Net financing expanded by 4.4% in the Higher total business loan disbursements forthcoming, particularly for residential
second quarter during the quarter properties
Net Financing* Household Loan Application for Residential
Business Loan Disbursement
Property and Passenger Car
Annual change, % / Cont. to growth, ppt
RM bn RM bn
Outstanding corporate bonds*
Outstanding loans 200 234 Residential Property 95
204 228
Net financing
87
4.7 2017-19 quarterly
80 81
4.4 average: RM197bn
180 179
1.5 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 2Q-21 2017-19 quarterly average: RM60bn
1.8
Non-SME and SME Loan Disbursement 52
RM bn Non-SME SME Passenger Car
42
3.2 24 22
2.7 21 19
150 158
122 16
75 78 76 2017-19 quarterly average: RM17bn
10
2017 - 19 1Q 2021 2Q 2021
1Q 2021 2Q 2021 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021
Quarterly average
Note: Data refers to loans from banking system and development financial institutions (DFIs), *Excludes issuances by Cagamas and non-residents
Numbers may not add up due to rounding
Source: Bank Negara Malaysia
21Banks continue to support financing needs of SMEs, complemented by BNM’s Fund
Banks continue to drive the major share Enhanced features of BNM’s Fund for
Bank financing to SMEs expanded by 6%
of the financing disbursed to SMEs SMEs
SME Financing Outstanding1 SME Financing Disbursements in 1H 20211
%yoy % share Refinancing flexibility to reduce
9.6 10.0 overall borrowing costs1
6.0 BNM’s Fund
1.6 for SMEs • PENJANA Tourism Financing
RM3.0 bn Up to 50% of total approved
3Q20 4Q20 1Q21 2Q21
disbursed to • Targeted Relief and Recovery Facility
SME Financing Disbursements2 more than
RM bn Investment-related 3 Working Capital
RM154 12,000 SMEs Up to 30% of total approved
75 2017-19 Quarterly Average billion
50 Expansion of eligible sectors for the
Targeted Relief and Recovery Facility
25 98%
• Open to viable SMEs in non-services
0 from FIs’
sector that are still not allowed to
3Q20 4Q20 1Q21 2Q21 own funds
operate in Phase 2 of the National
1 Banking system and DFIs, 2 Banking system only Recovery Plan (w.e.f. 5 Jul 2021)
3Investment-related financing includes loans for purchase of
securities, transport vehicles, non-residential property, fixed
1Banking system and DFIs
assets, and construction purposes, among others.
Source: Bank Negara Malaysia and PFI submission (as at 30 June 2021) 1 For 1 existing financing, except those under BNM’s Fund for SMEs
Source: Bank Negara Malaysia
22High take-up of repayment assistance will cushion impact from FMCO
Proportion of households and SMEs under repayment assistance remains manageable
Total borrowers under blanket moratorium (Apr-Sept 2020) and Proportion of loans under blanket moratorium in September 20202 and
Applications approved for repayment assistance (Oct 2020 to July 20211) under repayment assistance since
Households SMEs
Apr-20 to Sep-20 Oct-20 to May-21 Jun-21 and Jul-211 % share of accounts % share of accounts
76.7
66.7
8.3m 1.5m 2.1m
10.6 12.8 9.3 11.9
Sep-20 May-21 Jun-21 Sep-20 May-21 Jun-21
Of which: Of which: % share of loan value % share of loan value
77.1
67.8
250k 49k 61k 21.6
13.7 16.0 16.9
SMEs SMEs SMEs
Sep-20 May-21 Jun-21 Sep-20 May-21 Jun-21
Note:
1 July 2021 data covers period between 1 to 23 July 2021
2 Excludes borrowers that have resumed repayments over the 6-month moratorium period
Source: Bank Negara Malaysia
23Updated
Banking system is supporting borrowers and ongoing economic recovery
Banks continue to build up loan loss Capital and liquidity positions remain
… amid elevated credit risks
provisions… supportive of intermediation activity
Provisions Gross Impaired Loans and Stage 2 Loans1 Ratios Total Capital Ratio and Liquidity Coverage Ratio
RM billion % %
Provisions As % of total loans Impaired Loans MFRS 9* Stage 2 Loans
9.9 9.9 9.7
0 1.77 1.81
1.68
0
1.49
0
32.8 33.8 7.8 1.62 17.9 149.1
0 30.7
0 27.1 1.56 1.58
0
0
0
Total Capital Ratio Liquidity Coverage Ratio
0
Mar-21: 18.1 Mar-21: 145.1
0 1.37 Dec-20: 18.9 Dec-20: 148.2
0
Sep-20 Dec-20 Mar-21 Jun-21 Post-stress test2: 16.8
Sep-20 Dec-20 Mar-21 Jun-21
1 Refers to loans that have exhibited deterioration in credit risk, for which banks are required to set aside provisions based on lifetime expected losses
2 Projected total capital ratio for December 2022, based on the Adverse Scenario 2 of the macro stress test released in the Financial Stability Review Second Half 2020
* MFRS 9 - Malaysian Financial Reporting Standard 9
Source: Bank Negara Malaysia
24Updated
In summary…
Growth improved in 2Q 2021, with economic activity weighed by
the FMCO in the later part of the quarter
Growth is expected to trough in 3Q 2021 before improving in 4Q 2021, in line
with strong external demand conditions and easing of containment measures
The Malaysian economy is now projected to grow between 3% and 4% in 2021
The near-term outlook, however, is highly dependent on COVID-19 risk factors
Growth to accelerate in 2022 supported by a normalisation in economic activity amid a high
vaccination rate and continued improvement in external demand
25Additional Information
Add. Info
Malaysia’s GDP growth improved to 16.1% in 2Q 2021
Annual change in GDP growth by component
Real GDP Share1 % 2020 2021 Real GDP Share, % 2020 2021
(% YoY) (2020) 2Q 1Q 2Q (% YoY) (2020) 2Q 1Q 2Q
Domestic demand
93.8 -18.8 -1.0 12.3
Services 57.7 -16.2 -2.3 13.4 (excluding stocks)
Private Sector 75.2 -20.4 -0.9 13.0
Consumption 59.5 -18.5 -1.5 11.6
Manufacturing 23.0 -18.3 6.6 26.6
Investment 15.7 -26.1 1.3 17.4
Public Sector 18.6 -11.1 -1.5 9.7
Agriculture 7.4 0.9 0.2 -1.5 Consumption 13.4 2.2 5.9 9.0
Investment 5.2 -40.1 -18.6 12.0
Net exports of goods and
Mining and Quarrying 6.8 -20.8 -5.0 13.9 6.5 -37.9 0.8 34.3
services
Exports 61.5 -21.7 11.9 37.4
Imports 55.0 -19.7 13.0 37.6
Construction 4.0 -44.5 -10.4 40.3
Change in stocks, RM bn -0.3 7.3 -1.7 15.8
Real GDP 100.0 -17.2 -0.5 16.1 Real GDP 100.0 -17.2 -0.5 16.1
1Numbers do not add up due to rounding and exclusion of import duties component
Source: Department of Statistics Malaysia
26Add. Info
Malaysia’s GDP growth improved to 16.1% in 2Q 2021
Percentage point contribution to GDP growth by component
Real GDP Share1 % 2020 2021 Real GDP Share, % 2020 2021
(Ppt contribution, %) (2020) 2Q 1Q 2Q (Ppt contribution, %) (2020) 2Q 1Q 2Q
Domestic demand
93.8 -17.7 -0.9 11.4
Services 57.7 -9.3 -1.3 7.8 (excluding stocks)
Private Sector 75.2 -15.8 -0.7 9.7
Consumption 59.5 -10.8 -0.9 6.6
Manufacturing 23.0 -4.1 1.5 5.9
Investment 15.7 -5.1 0.2 3.0
Public Sector 18.6 -1.8 -0.2 1.7
Agriculture 7.4 0.1 0.0 -0.1 Consumption 13.4 0.2 0.7 1.3
Investment 5.2 -2.1 -0.9 0.5
Net exports of goods and
Mining and Quarrying 6.8 -1.6 -0.4 1.0 6.5 -2.6 0.0 1.8
services
Exports 61.5 -13.9 7.2 22.6
Imports 55.0 -11.3 7.1 20.9
Construction 4.0 -2.1 -0.5 1.2
Change in stocks -0.3 3.1 0.4 2.9
Real GDP 100.0 -17.2 -0.5 16.1 Real GDP 100.0 -17.2 -0.5 16.1
1Numbers do not add up due to rounding and exclusion of import duties component
Source: Department of Statistics Malaysia
27Add. Info
Financial account registered a net outflow in 2Q 2021
Inflows in direct and portfolio investment accounts partially offset sizeable outflows in other investment account
Financial Account by Component
2020 2021 Continued FDI inflows amid more
RM billion
3Q 4Q Year 1Q 2Q moderate DIA outflows
Direct Investment -2.2 1.6 2.8 1.4 4.2
Direct Investment Abroad (DIA)* -1.8 -5.2 -11.9 -7.8 -4.0
Foreign Direct Investment (FDI)* -0.3 6.8 14.6 9.1 8.2
Higher portfolio investment inflows
Portfolio Investment -20.3 -7.1 -48.2 0.4 20.0
Residents -20.8 -19.9 -59.3 -14.2 -10.6
Non-residents 0.5 12.8 11.1 14.6 30.5
Financial Derivatives -0.5 -0.9 0.4 0.3 -0.6
Significant other investment outflows
due mainly to repayment of interbank
Other Investment -8.1 -3.7 -31.1 13.9 -30.5
borrowings
Financial Account Balance -31.1 -10.2 -76.2 16.0 -7.0
*As per the IMF’s BPM5 classifications (i.e. directional basis)
Note: Numbers may not add up due to rounding
Source: Department of Statistics Malaysia; and Bank Negara Malaysia
28Add. Info
Continued FDI net inflows in 2Q 2021
This was driven by larger reinvestment of earnings and sustained equity injections into Malaysia
Quarterly Net Foreign Direct Investment (FDI)
RM billion
Larger reinvestment of earnings, mainly in the
manufacturing sector
15
+RM7.0 billion in 2Q-21 (1Q-21: +RM4.1 billion)
9.1
10
6.8
5.7
5 8.2
2.5
-0.3 Higher equity injections, mainly driven by additional
0 capital injection in the financial services sub-sector
+RM4.9 billion in 2Q-21 (1Q-21: +RM4.4 billion)
-5
-10
Sizeable debt outflows, primarily reflecting MNCs’
-15
1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 2Q-21 treasury management operations
-RM3.6 billion in 2Q-21 (1Q-21: +RM0.7 billion)
Equity and investment fund shares Reinvestment of earnings
Debt instruments FDI
Source: Department of Statistics Malaysia, Bank Negara Malaysia
29Add. Info
Malaysia’s external debt remains manageable
Banks are resilient to face potential …while corporates’ external debt is …and Government’s external debt mainly
external shocks… mainly subject to prudential requirements in ringgit
Banks’ FCY and USD Net Open Positions as
Percentage of Capital Corporate External Debt Breakdown by Instrument Government External Debt Breakdown by
% of total capital (as at end-2Q 2021) Currency (as at end-2Q 2021)
FCY USD RM billion RM billion
6 4.8 NR holdings of domestic
debt securities
4 13.1
17.9 Other debt liabilities
2 3.5
Trade Backed by
0 61.6 export earnings
credits
Apr
Aug
Sep
Mar
May
Oct
Apr
Mar
May
Jan
Feb
Jun
Jul
Nov
Dec
Jan
Feb
Jun
Ringgit-denominated
On 231.5
2020 2021 126.3 Intragroup concessionary Not affected by ringgit exchange rate
loans and flexible fluctuations
Banks’ FCY Liquid External Assets* and FCY terms
External Debt-at-Risk**
RM billion
126.6 Bonds and
124.7 notes Subject to
prudential
Foreign currency-denominated
requirements
59.6 Comprise medium- and long-term loans and
65.8 Loans
28.4 bonds and notes, suggesting limited rollover risks
FCY Liquid external FCY External Total: RM411.4 billion Total: RM259.9 billion
assets debt-at-risk
* Consist of currency and deposit placements, and portfolio investments
** Consist of short-term financial institutions’ deposits, interbank borrowings and loans from unrelated counterparties
Source: Bank Negara Malaysia
30Add. Info
Since the March projection, several developments and key assumptions have altered the
growth outlook
Changes in key assumptions since EMR publication on 31 March 2021
EMR 2020 QB 2Q 2021
Better 2021 global growth
Global growth: 5.5% Global growth: 6.0%
outlook
Higher commodity prices USD52 - USD62 USD62 - USD72
Brent crude oil (USD per barrel)
• PERMAI Assistance Package
Wider scope of stimulus • PERMAI Assistance Package • PEMERKASA
measures • PEMERKASA • PEMERKASA+
• PEMULIH
Rapid progress in vaccination Majority of total population Majority of total population
rates vaccinated by 1Q 2022 vaccinated by end-2021
MCO in most states, Nationwide MCO3.0 and Full
Stricter containment measures
followed by targeted interventions1 Movement Control Order (FMCO)
1 MCO 2.0 was imposed in all states except Sarawak on 22 January, which ended in all states at 4 March. Targeted interventions based on localities and cluster locations only.
Source: International Monetary Fund (IMF) January and July 2021 World Economic Outlook (WEO), Bank Negara Malaysia
31Add. Info
Unleashing of individual savings for consumption could provide additional lift to Malaysia’s
growth in 2021 and 2022
Significant rise in savings in some advanced economies, Similar trend was observed in Malaysia, with a sharp
which can potentially fuel pent-up demand in 2021 increase in individual savings since March 2020
Malaysia: Total Stock of Individual Current and Savings Account
Vaccine Economics, Allianz Research (Dec 2020) (CASA) Balances
1
“Unleashed excess savings could bring close to +1.0ppt of GDP RM billion
growth in 2021 in Europe through additional consumer spending” 306.5
290
2 Chief Economist, Bank of England (Dec 2020)
“Huge pent-up demand will help economy bounce back. As
people’s incomes held up and spending was restrained, they
have amassed around £100bn of excess savings. Once 250
vaccines are given to people this spending should accelerate.” Individual CASA
JP Morgan (Jan 2021) 210
3
"The household saving rate almost doubled last year to 12.9%
(US). This could translate into a potential $1.5 trillion supporting
pent-up consumer demand as the pandemic subsides." 170
Jan-15 Feb-16 Mar-17 Apr-18 May-19 Jun-20 Jun-21
Source: Bank Negara Malaysia, various reports and newsflows
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