KUALA LUMPUR: Rebounding from the pandemic-induced economic shock, the Malaysian economy gathered momentum in 2022 as its growth rate surpassed expectations quarter after quarter. The first quarter of 2022 saw a growth rate of 5 per cent year-on-year. This was a remarkable rate compared to the 3.9 per cent that was achieved in the fourth quarter of 2021.
The pace continued through 2022. The second quarter registered a growth rate of 8.9 per cent, while a growth rate of 14.2 per cent was achieved in the third quarter. The high growth rates indicated that the Malaysian economy was recovering from the smothering effects of the pandemic.
The most significant sign of recovery came from an improvement in private consumption. By the third quarter of 2022, consumption had risen by 15 per cent year-on-year. The labour market also showed signs of improvement as the year progressed. Unemployment figures moderated over the course of the year.
Global demand for Malaysia’s exports was also up. Exports grew as borders opened and global pent-up demand materialised. It was not surprising that Malaysian exports increased almost 19 per cent (year-on-year) in the third quarter of 2022.
But while there were clear signs that the Malaysian economy had recovered from the debilitating effects of the pandemic, other problems arose. One of those problems was a labour shortage.
Migrant workers who had to leave Malaysia did not return for a range of reasons. But there was a burgeoning need for their services in many areas – including in plantations, restaurants and some manufacturing sub-sectors.
The Russia-Ukraine conflict put a major obstacle in the way of Malaysia’s recovery. Although the war did not directly affect Malaysia’s growth, it did lead to higher prices.
The conflict affected the prices of fertiliser, grain and other foods. Global oil prices saw some volatility, which affected transport costs.