Malaysian economy to recover in 2021, says World Bank

KUALA LUMPUR (BERNAMA) – Malaysia’s economy is expected to return to positive growth this year, along with other economies globally on the sustained progress in the vaccine rollouts that will boost consumption worldwide, the World Bank Group said.

Its Macroeconomics, Trade and Investment Global Practice Lead Economist Richard Record said the group expects the vaccine deployment can be mostly completed in 2021 in most economies, leading to strong recovery and demand, as well as boosting trade and commodity prices.

“We are projecting a global growth of four per cent this year. As for Malaysia, we project economic growth this year to range between 5.6 and 6.7 per cent,” he said during the virtual 2021 Malaysia’s Economic and Strategic Outlook Forum (MESOF) titled, ‘The Post-COVID-19 New Normal – Where Do We Go From Here’ yesterday.

MESOF is organised by KSI Strategic Institute for Asia Pacific and co-organised by the Malaysian International Chambers Of Commerce & Industry and Economic Club of Kuala Lumpur.

Record noted that China is among the reasons of growth recorded by the Asian economies and Malaysia included.

A motorcyclist rides past wearing a face mask with the background of the Twin Towers in downtown Kuala Lumpur. PHOTO: AP

However, he cautioned the downside risks to growth is the slow progress of the vaccine deployment and new containment that could lead to another movement control order, adding that consumption is the largest part of the Malaysian economy.

“Risks to growth outlook include the unexpected delay in vaccine rollout, ineffective containment, elevated number of vulnerable households and domestic political uncertainty.

“In the near-term, policies should focus on containing the outbreak and protecting the most vulnerable and on re-building fiscal buffers as economic conditions improve,” he added.

Another panellist, Chief Economist of Juwai IQI Global Shan Saeed said the Malaysian government continues to maintain macroeconomic stability which is moving faster and has surprised the market participants.

“The government is in total control of the economy and will continue to support when required by the economy. Amalgamation of fiscal and monetary policy levers hold the key for economic growth and Bank Negara Malaysia has lot of room to manoeuvre in the monetary landscape,” he said.