KUALA LUMPUR: Malaysia’s gross domestic product (GDP) is projected to contract by 0.1% to 4.6% this year amid the negative impact caused by Covid-19, according to the World Bank.
Its senior economist for finance, competitiveness and innovation global practice, Smita Kuriakose, said the impact on Malaysia’ economy was likely to be large due to the outbreak’s adverse impact on foreign direct investment (FDI), commodities and tourism as well as domestic shocks due to the Movement Control Order (MCO).
Malaysia is also among the economies most connected to global supply chains.
Globally, she said, trade had declined on par with the most acute phase of the global financial crisis in 2008/2009.
Since the coronavirus outbreak started and up to March 23, the outflow from the emerging markets was the largest ever recorded at US$83 bil (RM360 bil), while global direct foreign investment was likely to drop by 30%-40% this year, she added.
Meanwhile, 75 million jobs are at risk in the travel and tourism sector, with two-thirds being in Asia.
“We must acknowledge the fact that recovery would not be uniform across sectors and even regions,” she said during a web-based seminar hosted by not-for-profit think-tank Research For Social Advancement (REFSA) titled “Flattening the recession curve: Saving SMEs and preserving jobs.”
She said ample initiatives need to be launched to help SMEs amid the disruption in supply chain and demand.
According to Smita, local SMEs particularly still lag in utilising the digital platform and this needs to be addressed.
While the government had shown its commitment to react quickly and had allocated substantial resources to respond to the outbreak, recovery was likely to take years, she observed. – April 10, 2020, Bernama