MALAYSIA’S gross domestic product (GDP) is expected to bounce back to a positive of 4% to 5% in the fourth quarter of 2020 (4Q 2020), seeing as most sectors are experiencing recovery, especially for the manufacturing sector.
Inter-Pacific Asset Management Sdn Bhd CEO Datuk Nazri Khan believes that judging from 3Q 2020’s GDP performance of -2.7%, Malaysia is still on track to achieve its 2020 full year target or -3.5% to -5.5%.
“Although we do not know what will happen next with regards to the COVID-19 pandemic, there are signs showing that the negative effect of the pandemic is not as bad as expected, following the recovery of productivity amidst the reinstatement of the conditional movement control order (CMCO) since mid-October this year.
“Therefore, we project the 2020 full-year GDP to reach -4%, in line with the -3.5% to -5.5% forecast by the Bank Negara Malaysia,” he told Bernama.
As for 2021, Nazri targeted the annual GDP growth to recover to 6.5%, mainly supported by the RM322.5 bil Budget 2021 which includes a record high development expenditure allocation of RM69 bil.
“Budget 2021 gives great emphasis on projects with high-multiplier impact, such as the revival of the Mass Rapid Transit 3 (MRT3) and Pan Borneo Highway projects, which is expected to give positive impact from as early as Q1 2021,” he said.
Apart from that, Nazri noted that the improvement in the unemployment rate, which declined to 4.6% in September 2020 from its peak of 5.3% in May 2020, would also help accelerate the country’s economic growth.
“To me, the labour market is the pillar to boost domestic demand, and the government should focus on the employment condition in our country to ensure sustainable economic growth, moving forward,” he said.
He was optimistic that the unemployment rate in Malaysia would be reduced to the pre-COVID-19 level of three per cent over the next two years following the expected rollout of the COVID-19 vaccine next year, along with the RM305 bil worth of stimulus packages aimed at mitigating the pandemic’s negative impact. – Nov 23, 2020
