Bank Negara Malaysia (BNM) said Malaysia’s economic growth is likely to be in the lower range of its 6% to 7.5% forecast for 2021. This is if downside risks materialise, mainly relating to ongoing uncertainties surrounding the Covid-19 pandemic as well as commodity shocks which can happen anytime. This was reported by Ahmad Naqib Idris from The Edge.
BNM governor Datuk Nor Shamsiah Mohd Yunus said the Malaysian economy is expected to rebound from the second quarter of this year onwards and return to pre-pandemic levels by mid-2021.
She said a rebound in global growth in 2021 will drive a strong recovery in exports, particularly in electrical and electronic (E&E) products, on the back of a technology upcycle.
Besides that, she said private consumption will be supported by a gradual improvement in labour market conditions amid relaxation of containment measures, improving consumer sentiments from the vaccine roll-out and continued policy support that remains available particularly for vulnerable households.
Investment activity is also expected to pick up following the lifting of movement restrictions as well as favourable external demand conditions.
BNM’s view seems rather optimistic, especially when many CEOs expect improvements are only likely in 2022 and beyond; private/ domestic consumption remains subdued with job losses, business closures; and, general investment climate not conducive owing to political uncertainties.
The latest forecast flies against other reputable private sector estimates on GDP growth for 2021. Does the Government know something we don’t?
Ahmad Naqib Idris, BNM: Malaysia's 2021 GDP growth likely closer to lower range of 6% to 7.5% forecast if downside risks materialise, 31 March 2021, The Edge