KUALA LUMPUR: Malaysia’s gross domestic product (GDP) for 2020 could range between +0.4% and -2% but more likely to hover around -1.1%.
AmBank Research said based on the economic performance in the first quarter of 2020 (1Q20), the economy already inherited a weak performance from selected sectors since 2019.
The economy reported its weakest growth since 3Q09, with 1Q GDP growth coming in at +0.7% year-on-year, beating market’s and the bank’s expectations of -1% and -2.8%, respectively.
“The pandemic virus impact, added with the collapse in oil prices, just aggravated some of the already weak sectors while dampening new areas of economic activities such as services,” it said in a note today.
It said the global recession was now perceived to be unlike the 1930s since the current world economy is being supported by stimulus monetary and fiscal measures, plus the gradual relaxation of lockdowns should provide some impetus to export.
Meanwhile, Public Investment Bank said Malaysia’s economic growth for 2Q20 will be notably affected by the Covid-19 pandemic due to the longer Movement Control Order (MCO) period.
However, the economic growth might recover gradually in 3Q following the reopening of the economy in early May before accelerating further in 4Q, said the investment bank.
“Barring unforeseen circumstances like a sharp resurgence of Covid-19 cases, the economy may reach its potential in 4Q though it is unlikely to be in full capacity due to the need for social distancing.
“This may continue to be so until there is a vaccine for Covid-19 which may at the earliest be available at the end of the year, if not next year,” said Public Investment Bank in a note today.
It added that growth prospects should improve in 2021 with the expected containment of the pandemic. – May 14, 2020, Bernama
