HLIB: Malaysia’s economic growth will continue in 2022 after 4Q21 recovery


KUALA LUMPUR (February 10): Hong Leong Investment Bank Bhd (HLIB) said Malaysia’s economic growth momentum is expected to continue in 2022 with further normalization of economic activities, helped by factors such as progress in immunization against the Covid-19 and the labor market recovery following market findings that the country’s gross domestic product (GDP) could have increased in the fourth quarter of 2021 (4Q21) for full-year growth compared to the year former.

HLIB economists Felicia Ling and Goh Khing-Mae wrote in a note on Thursday February 10 that the investment bank expects Malaysia’s GDP to grow 5.5% in 2022 from the year former.

“We expect 4Q21 GDP to recover and grow by +3.6% YoY (consensus forecast: +3.1% YoY; 3Q21: -4.5% YoY) following the easing of most economic restrictions and the reopening of interstate borders.

“Besides construction and mining, other economic sectors are expected to show recovery. If 4Q21 GDP printing were to reach our forecast rate of +3.6% YoY, this would bring 2021 GDP to +3.1% YoY, which is lower than our initial forecast of +3.5% YoY and within the Government’s forecast range of 3.0% to 4.0%,” they said .

Bank Negara Malaysia (BNM) is expected to announce the country’s 4Q21 and full-year 2021 GDP performance on Friday.

For 2020, Malaysia’s economy contracted by 5.6% due to movement restrictions imposed by Covid-19 to curb the spread of the pandemic, according to the BNM statement of February 11, 2021.

CGS-CIMB Securities Sdn Bhd economists Nazmi Idrus and Lim Yee Ping wrote in a note on Thursday that CGS-CIMB estimated Malaysia’s GDP could have grown 4.1% in 4Q21 from a year earlier. for full-year growth of 3.3% in 2021. .

According to Nazmi and Lim, flash floods, shortage of foreign workers and raw materials, as well as rising price pressures may have affected the country’s economic recovery momentum in 4Q21.

“Based on available datasets, which cover over 80% of GDP, we estimate that the Malaysian economy may have expanded by 4.1% year-on-year in 4Q21, rebounding from a 4.5% contraction in year-on-year in 3Q21 and bringing full-year GDP growth to 3.3% in 2021.

“The pace of growth was, however, weaker than our previous expectations of a 5.0% YoY increase for 4Q21 and 3.5% for 2021, as the rebound in consumption has not been as stronger than expected,” they said.


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