KUALA LUMPUR, Aug 13 — The Malaysian labour market is expected to recover going into 2022 although at a more moderate pace after witnessing a weaker 2021 outlook, Bank Negara Malaysia (BNM) said.
Governor Datuk Nor Shamsiah Mohd Yunus said this is in line with the faster progress of the vaccination programme and expected lifting of movement restrictions that will support improvement in economic activity.
“Labour market indicators in the first two months of the second quarter showed continued improvement.
“But the imposition of full movement control order (FMCO) has affected recovery in June and as a result, employment had declined in the second quarter by 29,000 persons while the unemployment rate remained elevated at 4.8 per cent,” she told a press conference on the ‘Economic and Financial Developments in Malaysia in Q2 2021’ report released today.
According to data by the Department of Statistics, the number of employed persons in June 2021 declined by 0.5 per cent to record 15.3 million persons (compared to 15.37 million in May 2021) with the employment-to-population ratio fell by 0.4 percentage points to 65 per cent.
Elaborating further, Nor Shamsiah said consumer, tourism and travel-related services have continued to face challenging conditions from the prolonged FMCO and BNM expects these sectors to recover at a slower pace compared to the Covid-19 resilient and export-oriented sectors.
“Nevertheless we do expect the labour market conditions to resume its recovery trajectory once the benefit from the vaccination programme begins to materialise and it will also improve our health situation domestically.
“This will allow for restriction to be lifted and economic activities to gradually normalise”.
Asked if the current uncertainty in the political development would impact the economy, Nor Shamsiah replied: “The crisis can be from anywhere but the impact of the crisis will come to the financial market. So you can have the global crisis for example, but the first impact, the first channel of that crisis will be the financial market. It will be volatile.
“So that’s where Bank Negara is entrusted to make sure that regardless of this volatility and regardless of what causes that volatility Bank Negara do have the tools to have the policies and the ability to make sure that the financial markets continue to be orderly.
“If the financial market continues to be orderly, the spillover to the real economy will be mitigated. We have the track record of maintaining orderly financial markets and it will continue to be our mandate,” she said.
The central bank today announced that the Malaysian economy grew by 16.1 per cent in the second quarter (Q2 2021) year-on-year compared with -0.5 per cent in the first quarter of the year, supported mainly by the improvement in domestic demand and continued robust exports performance.
This was against the -17.1 per cent GDP growth recorded in the same period a year ago, as it took the brunt of the lockdown measure as Covid-19 hit the country.
The central bank said the strong growth reflected the low base from the significant decline in activity during the second quarter of 2020. — Bernama