Page 40 - Bank-Muamalat-Annual-Report-2021

38 BANK MUAMALAT MALAYSIA BERHAD
ABOUT US OUR LEADERSHIP OUR STRATEGY OUR PERFORMANCE

MARKET AND

INDUSTRY OVERVIEW

2021 - Resolve & Resilience
Malaysia’s Gross Domestic Product (GDP) Growth (%)
With the challenges of COVID-19 pandemic
5.6 4.7 6.0 5.0 4.2 5.9 4.7 4.3 -5.6 3.1
prolonging into 2021, it proved to be another
tough year globally as economies fought to
recover. The year began with a crisis when
the Delta variant of COVID-19 spread across
various countries and regions. The virus
spread quickly, and at its worst, the variant hit
India hard before causing a crisis in Southeast
Asian countries, including Malaysia, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Singapore, Indonesia, and Thailand. The
unprecedented situation severely affected the Source of original chart: BNM: Malaysia’s 4Q21 GDP grew 3.6% Y-o-Y, full-year expansion at
global economy. 3.1% | The Edge Markets

In the second half of the year, inflation has
Despite the encouraging figures, the local economic performance in 2021
become a major threat due to rising energy
remains well below its pre-pandemic level in 2019. Unemployment rate in
prices and supply disruptions. Most notably,
Malaysia rose marginally to 4.6% from 4.5% in 2020, which is directly caused
the US inflation is at the highest level in
by the reopening of the nation’s economy. Due to the easing of COVID-19
40 years, and UK inflation is at a 30-year high.
restriction measures and accelerated COVID-19 vaccine booster distribution, a
Elevated inflation is expected to persist for
brighter projection is expected for the year ahead, as the government projects
long after a war between Russia and Ukraine
the country’s unemployment rate to fall to 4% for 2022.
added further woes to the ongoing supply
chain disruptions and high energy prices in The inflation of currency increased by 3.2% year-on-year in December 2021,
2022. mainly due to the rise in food and fuel prices. Despite the transitory supply-chain
challenges though, Malaysia’s inflation is expected to stabilise at 2.5% soon.
Global gross domestic product (“GDP”) was
5.5%, unable to meet the initial projected
Source: Malaysia's central bank trims 2022 GDP forecast, sees supply chain disruption - CNA
forecast of 6.1% due to supply disruptions,
worsening pandemic dynamics in developing
nations, and the spread of new coronavirus Meanwhile, the Malaysian banking sector managed to close out the year on
variants. a strong note despite facing initial challenges earlier in the year, with total
financing/loan accelerating further to 3.3% from 2.9% Y-o-Y in September.
Sources:
Household and business segments recorded growth rates of 3.7% and 2.9%,
- World Economic Outlook, October 2021:
Recovery During A Pandemic respectively. The household segment was kept buoyed by stronger home, auto
- World Economic Outlook, April 2022: and credit card financing/loan, while the business segment's working capital
War Sets Back The Global Recovery
financing has supported its growth. In general, Malaysian banks rebounded
strongly in 2021 in terms of profits, which is a result of lower provisioning
Back in Malaysia, the country posted 3.1% expenses, broader net interest margins (“NIMs”) and significantly smaller
GDP economic growth in 2021, improving modification charges.
upon the -5.6% fallout in 2020.