Unemployment rate to trend lower this year
Malaysia’s unemployment rate is expected to trend lower this year and analysts continue to believe that the labour market will improve further in 2022.
To recap from the Department of Statistics’ latest figures, the number of unemployed persons during March 2022 continued to decrease with a reduction of 0.4 per cent or equivalent to 2.6 thousand persons to 669.2 thousand unemployed persons.
It was also revealed that the unemployment rate in March 2022 remains at 4.1 per cent.
“Malaysia’s unemployment rate is expected to trend lower this year underpinned by a further recovery in the domestic economy, continuous upbeat momentum in global trade, and coupled with skyrocketting commodity prices,” the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) said.
“With the announcement of international borders reopening, Malaysia’s labour market recovery remains on steady path following the possible return of non-citizens workers.
“However, we view the return of foreign workers would be in modest pace amid labor rules and Covid-19 measures that need to be satisfied.
“Hence, we keep our average unemployment rate forecast at four per cent for this year, higher than pre-pandemic level 3.4 per cent.”
While downside risks to growth persist mainly associated with the potential surge of Covid-19 cases brought by the new variant, the ongoing Russia-Ukraine crisis and China’s economic slowdown due to its zero-Covid policy,
the research arm of Kenanga Investment Bank Bhd (Kenanga Research) continued to believe that the labour market will improve further in 2022.
“This is largely supported by the relaxation of pandemicrelated restrictions, reopening of borders for international tourist, and various ongoing policy support,” Kenanga Research said.
Against these backdrops, Kenanga Research retained its forecast that the unemployment rate to settle at 3.9 per cent in 2022, compared to 4.6 per cent in 2021.
Malaysia’s unemployment rate is expected to trend lower this year underpinned by a further recovery in the domestic economy, continuous upbeat momentum in global trade, and coupled with skyrocketting commodity prices.