Maybank IB expects economy to grow by 5.1 per cent in 2021

KUALA LUMPUR (BERNAMA) – The Malaysian economy is expected to grow by 5.1 per cent this year compared to last year’s 5.4 per cent contraction as the country’s recession is shallowing amid the third wave of COVID-19.

Maybank Investment Bank Bhd (Maybank IB) Chief Economist Suhaimi Ilias said the forecast was conservative relative to the current official forecast of the smaller decline of 4.5 per cent last year with the economy to grow between 6.5 to 7.5 per cent in 2021.

“The third wave of COVID-19 which has caused a spike in cases will continue to be a downside factor.

“However, as of latest data in December 2020, manufacturing, technology, finance are joining healthcare in the recovery process, while tourism-related services continue to lag,” he said at a virtual Maybank Wealth Talk ‘New Decade, New Cycle, New Market Environment’ yesterday.

On the pandemic, Suhaimi said the introduction of restrictions and lockdowns in recent months has raised concerns about the impact on the economy, especially given the inverse relationship last year between the gross domestic product (GDP) globally and Malaysia.

“The restriction has affected mobility and the investment bank does see the strong correlation between GDP and mobility.

“As to our estimate, under MCO 2.0, almost 80 per cent of the economy is operational and the ratio will rise up further compared to the first MCO. The estimated daily economic losses is not as big as MCO 1.0, and we are maintaining our official forecast of 2021 real GDP growth, of 4.1 per cent,” he said.