Malaysia to post strong economic recovery in Q4: Mustapa Mohamed
23 Jun 2021
Malaysia will likely record a strong economic recovery in the fourth quarter this year, despite a slight contraction of 0.5 per cent in the gross domestic product (GDP) in the first quarter.
Minister in the Prime Minister’s Department in charge of economic affairs Datuk Seri Mustapa Mohamed said this would be supported by a reduction in the number of Covid-19 cases through measures such as rapid vaccination and lockdowns, accompanied by strict observance of standard operating procedures.
“The Malaysian economy was on a solid recovery trajectory before May 2021 with a much improved real GDP growth performance of -0.5 per cent in the first quarter, and a strong rebound in several economic indicators.”
Unfortunately, the increase in Covid-19 cases and subsequent implementation of lockdown measures had affected the recovery, Mustapa said at the launch of the World Bank’s “24th Malaysia Economic Monitor: Weathering the Surge” here today.
The World Bank has revised its projected Malaysia’s GDP growth downwards to 4.5 per cent this year, which was lower than the government’s official estimate od between 6.0 per cent and 7.5 per cent.
“At the moment, our officials are crunching the numbers to assess the impact of the lockdown that began on June 1 on the Malaysian economy.
“Looking ahead, the Economic Planning Unit will continue to work closely with the World Bank Group’s inclusive growth and sustainable finance hub in Kuala Lumpur,” he said.
Meanwhile, Mustapa said the government was in the final stages of fine-tuning the 12th Malaysia Plan, outlining several fundamental reforms over the next five years to build back Malaysia from the pandemic.
Mustapa said this would ensure Malaysia would be on track in achieving a prosperous, inclusive and sustainable future.
The pandemic has weighed on the 12th Malaysia Plan implementation, which was supposed to be presented at Parliament on August 6 last year.
“Given the challenging circumstances, it is imperative for the government to have a clear pathway forward. The National Recovery Plan (NRP) provides a clear strategy for the country to emerge from the Covid-19 pandemic,” he said.
The NRP provided certainty to Malaysian workers and businesses, as it outlines clear timelines regarding the gradual opening of the Malaysian economy, he added.
“In recent days, we have done a lot better in ramping up our vaccination rollout. Of course, the rate of vaccinations is critical in reducing the number of infections and reviving the economy,” he said.
Mustapa said the global economic recovery had gained momentum after the marked contraction caused by Covid-19 last year.
In its Global Economic Prospects, the World Bank projected world GDP to expand 5.6 per cent this year compared to 4.0 per cent projected in January.
“Fiscal support from governments and a rapid rate of vaccinations have supported economic activity in major advanced economies, most notably the United States and other Western countries.
“Global manufacturing activity has also expanded, and industrial production has surpassed its pre-pandemic levels,” he said.
Mustapa said there was optimism around the world, which would positively affect the manufacturing and external sectors.
The recent pledge by the G7 leaders to contribute one billion Covid-19 vaccine doses within a year to poorer countries was a welcome development, he said.
“This pledge is pertinent because the recent pickup in economic activity across the globe has been quite uneven emerging economies, and low-income countries experiencing subdued pickups following the resurgence of Covid- 19 cases,” he added.
Source: NST 23