In its research note issued on Monday, it said a robust recovery in manufacturing and external trade activities alongside ongoing policy support are seen as key factors mitigating the impact of stricter containment measures and aiding the recovery last quarter.
"Nonetheless, this contraction - the fourth consecutive quarter of decline - is expected to be slightly less pronounced than the preceding quarters’ ," RAM said. BIMB Research cited several points for the more upbeat GDP for 1Q, which included stronger industrial production index ; exports growth; lower unemployment; slower contraction in the construction work and services index; wholesale & retail trade increased; and an improvement in consumer sentiment index.
BIMB Research pointed out the labour force expanded which led to the rise in numbers of unemployed slower .Services index recorded a smaller contraction -3.6% yoy in 1Q21 whilst total revenue of services sector in 1Q21 contracted by 2.1% yoy, an improvement from 5.1% decline in the previous quarter .The latest consumer sentiment index by MIER for 1Q21 rose by 13.7 points to 98.9, the highest reading in ten quarters, pointed to the better consumer confidence.
However, based on the strong performance of the manufacturing export sector and industrial production accompanied by rebound in distributive trade, Malaysia’s economy could surprise with a narrower decline of 0.6% yoy in 1Q21.
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