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Malaysia’s economy contracted 5.6 per cent in 2020

State Socioeconomic Report 2020

Release Date : Thursday 05, August 2021 1200



In 2020, Malaysia’s economic performance contracted 5.6 per cent as compared to 4.4 per cent in the preceding year. In general, albeit a negative growth posted by all states, eight states registered better growth magnitude as compared to the 5.6 per cent contraction at the national level. W.P. Labuan recorded a decrease of 0.5 per cent, followed by Kelantan (-1.1%), Kedah (-1.7%), Pulau Pinang (-2.1%), Perak (-2.3%), Negeri Sembilan (-3.6%), Johor (-4.6%) and Selangor (-5.3%). Meanwhile, six states namely Selangor, W.P. Kuala Lumpur, Johor, Sarawak, Pulau Pinang and Sabah remained as the largest contributor to the national GDP with a total contribution of 72.1 per cent (2019: 72.3%).


Chart 1: Economic growth by state and economic activity, 2020



Malaysia recorded a negative inflation rate of 1.2 per cent in 2020. Among the most affected groups were transport (-10.0%), followed by housing, water, electricity, gas & other fuels (-1.7%) and clothing & footwear (-0.8%). In overall, Consumer Price Index (CPI) of all states decreased between negative 0.6 per cent to negative 1.9 per cent in 2020. Melaka dropped to 1.9 per cent followed by Sabah & W.P. Labuan (-1.9%), Kedah & Perlis (-1.8%) and Sarawak (-1.8%). However, moderate decline was posted by Selangor and W.P. Putrajaya (-0.6%), followed by W.P. Kuala Lumpur (-0.6%), Pulau Pinang (-0.8%) and Pahang (-1.2%).



Malaysia's total trade in 2020 decreased 3.6 per cent to RM1.78 trillion as compared to RM1.84 trillion in 2019. Merchandise exports fell to 1.4 per cent influenced by a lower performance recorded in Sarawak (-19.0%), Selangor (-5.7%), Johor (-2.6%), Sabah (-14.8%), W.P. Kuala Lumpur (-9.8%), Terengganu (-16.7%) and Negeri Sembilan (-10.7%). However, increase in exports value was recorded in Pulau Pinang with a growth of 10.0 per cent, followed by Pahang (13.5%), Perak (6.9%), Melaka (1.7%) and Kelantan (1.7%). Among the main products spearheading the increase in exports were electronic integrated circuits in Pulau Pinang, iron and steel (Pahang), rubber gloves (Perak & Kelantan) and other electrical & electronic products (Melaka).



From a labour market perspective, the Labour Force Participation Rate (LFPR) at the national level fell 0.3 percentage points to 68.4 per cent (2019: 68.7%). However, at the state level, W.P. Labuan, W.P. Kuala Lumpur, Perak, Pulau Pinang, Johor and Sabah recorded a higher LFPR in 2020. The highest LFPR was recorded in Selangor with 75.4 per cent followed by W.P. Putrajaya (72.5%), W.P. Kuala Lumpur (72.1%) and Johor (70.4%) whilst the lowest LFPR were recorded in Kelantan with 57.9 per cent. On the other hand, the annual unemployment rate in Malaysia heightened to 4.5 per cent in 2020, the highest rate after almost three decades. All states recorded an increase in unemployment rate where Sabah (8.0%), W.P. Labuan (7.2%) and Perak (4.8%) surpassed the national level (4.5%). In contrast, low unemployment rate was posted by W.P. Putrajaya (1.5%), Melaka (2.2%) and Pahang (3.1%).



The mean monthly salaries & wages received by Malaysian citizen employees subdued to 9.0 per cent from RM3,224 to RM2,933. It was reflected by the decline in all states in 2020, with Johor registering negative 13.0 per cent, Terengganu (-12.4%), W.P. Kuala Lumpur (-12.3%), W.P. Labuan (-11.5%), Sarawak (-11.0%) and Selangor (-10.6%). However, in terms of value, W.P Putrajaya recorded the highest mean monthly salaries & wages with RM4,497. The other states that exceeded the national average (RM2,933) were W.P. Kuala Lumpur (RM3,823), Selangor (RM3,480), Negeri Sembilan (RM3,013) and W.P. Labuan (RM2,942).



The mean monthly salaries & wages of employed graduates in Malaysia deteriorated to 10.6 per cent. Five states with significant decrease were Sabah (-19.1%), W.P. Kuala Lumpur (-14.4%), Sarawak (-13.1%), Terengganu (-11.8%) and Selangor (-11.2%). W.P. Kuala Lumpur and W.P. Putrajaya topped the list with RM5,443 and RM5,365 per month respectively. This was followed by Selangor (RM4,772) and Negeri Sembilan (RM4,496) while lower mean values were recorded by Sabah (RM3,900) and Kedah (RM3,729).



Malaysia’s domestic tourism expenditure in 2020 plummeted 60.8 per cent to a value of RM40.4 billion (2019: RM103.2 billion). The arrival of domestic visitors also decreased by 44.9 per cent to record 131.7 million visitors as compared to 239.1 million visitors in 2019. Among the states with the highest dropped in the number of domestic visitors were Sabah (-53.1%), Sarawak (-52.5%), Johor
(-49.3%), Melaka (-48.0%) and Terengganu (-47.6%).



In 2019, Sarawak State Government recorded the highest revenue amounted to RM7.3 billion, followed by Sabah State Government (RM4.3 billion), Terengganu State Government (RM2.6 billion), Selangor State Government (RM2.3 billion) and Johor State Government (RM1.7 billion). Meanwhile, Kelantan State Government recorded highest surplus value (RM445.7 million), followed by Terengganu State Government (RM260.0 million), Sabah State Government (RM214.2 million) and Pahang State Government (RM191.4 million).

Out of 15 city councils, 10 city councils recorded the highest financial position which involving local authorities in W.P. Kuala Lumpur, Selangor, Johor, Pulau Pinang, Perak, Melaka and Sabah. Dewan Bandaraya Kuala Lumpur (DBKL) recorded highest revenue with RM3.2 billion. 

On the other hand, ten district councils showed the highest financial position involving local authorities in Selangor, Perak, Johor and Pahang. Majlis Daerah Kuala Selangor recorded highest revenue in 2019 with RM159.4 million, followed by Majlis Daerah Kuala Langat (RM105.4 million) and Majlis Daerah Hulu Selangor (RM101.5 million).


This publication can be accessed and free download through the eStatistik on the DOSM website, www.dosm.gov.my.


Johor Kedah Kelantan Melaka Negeri Sembilan
Pulau Pinang Pahang Perak Perlis Sabah
Sarawak Selangor Terengganu WP Kuala Lumpur WP Labuan




Released By:

 DrUzir_Mahidin    Dr_Uzir

5 August 2021


Contact person:

Mohd Yusrizal Ab. Razak 
Public Relation Officer

Strategic Communication and International Division
Department of Statistics, Malaysia
Tel : +603-8885 7942
Fax : +603-8888 9248
Email : yusrizal.razak@dosm.gov.my

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