UOB Malaysia Bhd expects Malaysia’s economy to rebound to 6% next year, against its earlier estimates of 5.5%.
The revision takes into consideration the Government’s efforts to counter the effects of COVID-19.
According to senior economist Julia Goh, the Government’s ongoing policy support through various fiscal packages, Budget 2021 measures and the cumulative interest rate cutes will provide impetus for the country’s economy, which can already be seen from the improved external demand conditions.
The potential of an effective COVID-19 vaccine roll-out, better-than-expected recovery of the global economy and Malaysia’s diversified economic fundamentals also point to a positive outlook for next year.
Goh said another another potential growth catalyst is the progress of large infrastructure projects.
“Moreover, the revival of the Petronas Refinery and Petrochemical Integrated Development (RAPID) refinery complex and the commencement of the Petronas Floating Liquefied Natural Gas-2 facility will augur well for investments.
“We also expect that committed investments in the rubber, electrical and electronics and healthcare sectors will potentially drive growth next year,” she said.
However, Malaysia’s path to recovery will likely be uneven and dependent on the risks of any resurgent wave of the COVID-19 pandemic.
Additionally, the recent signing of the Regional Comprehensive Economic Partnership (RCEP) marks the broadening and deepening of economic and trade linkages, as well as the integration among Asia-Pacific economies.
“The outcome of the recent United States presidential election also bodes well for a new beginning in trade consultations and negotiations with China and this is expected to lead to improvements in the US-China ties that will ripple positively through the rest of Asia,” she said. – Nov 30, 2020