Malaysia poised for strong economic recovery in 2021 if no second virus wave – Fitch


US rating agency Fitch Ratings predicts a significant recovery of the Malaysian economy in 2021 after a painful, coronavirus-triggered recession this year.

The Fitch Group’s research unit in its recent revisions of its forecast for Malaysia said that the country’s GDP will contract by about 4.5 per cent in 2020, while 2021 will bring an upswing of 5.7 per cent with the expected lifting of restrictions on domestic movement and international travel – in case the coronavirus gets contained by then.

Fitch said that the second quarter brought so far the “worst contraction in Malaysia’s history” with a 17.1-per cent contraction of the country’s inflation-adjusted GDP mainly due to the prolonged “movement control order” which restricted consumption.

However, Fitch expects economic activity in Malaysia to pick up during the second half of 2020, in line with further easing of lockdown measures.

With no second Covid-19 wave, future looks bright

“Similar to other Asian economies such as Singapore, we believe that the worst has passed for Malaysia in terms of the recession, and in the absence of a second wave of Covid-19 infections, a recovery, albeit slow and fragile, is set to commence in the second half of 2020,” the research unit said in a report issued on August 14.

“The easing of restrictions would pave the way for a private consumption-led recovery in 2021, which we expect to contribute the lion’s share of the upcoming growth we are forecasting,” the ratings agency said.

“2021 is also likely to see investment return to growth as well, as domestic businesses gear up for the recovery beyond 2021 alongside a return of foreign direct investment as the region continues to undergo a re-configuration of supply chains,” it added.

However, Fitch also noted that a new wave of Covid-19 cases could hurt the outlook for Malaysia.

 “The emergence of a second wave of infections, both in Malaysia and in a number of major economies around the world such as China and the US – which is already grappling with an aggressive second wave – remain the key downside risk to our 2020 and 2021 forecasts,” Fitch said.



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US rating agency Fitch Ratings predicts a significant recovery of the Malaysian economy in 2021 after a painful, coronavirus-triggered recession this year. The Fitch Group’s research unit in its recent revisions of its forecast for Malaysia said that the country’s GDP will contract by about 4.5 per cent in 2020, while 2021 will bring an upswing of 5.7 per cent with the expected lifting of restrictions on domestic movement and international travel – in case the coronavirus gets contained by then. Fitch said that the second quarter brought so far the “worst contraction in Malaysia’s history” with a 17.1-per cent...


US rating agency Fitch Ratings predicts a significant recovery of the Malaysian economy in 2021 after a painful, coronavirus-triggered recession this year.

The Fitch Group’s research unit in its recent revisions of its forecast for Malaysia said that the country’s GDP will contract by about 4.5 per cent in 2020, while 2021 will bring an upswing of 5.7 per cent with the expected lifting of restrictions on domestic movement and international travel – in case the coronavirus gets contained by then.

Fitch said that the second quarter brought so far the “worst contraction in Malaysia’s history” with a 17.1-per cent contraction of the country’s inflation-adjusted GDP mainly due to the prolonged “movement control order” which restricted consumption.

However, Fitch expects economic activity in Malaysia to pick up during the second half of 2020, in line with further easing of lockdown measures.

With no second Covid-19 wave, future looks bright

“Similar to other Asian economies such as Singapore, we believe that the worst has passed for Malaysia in terms of the recession, and in the absence of a second wave of Covid-19 infections, a recovery, albeit slow and fragile, is set to commence in the second half of 2020,” the research unit said in a report issued on August 14.

“The easing of restrictions would pave the way for a private consumption-led recovery in 2021, which we expect to contribute the lion’s share of the upcoming growth we are forecasting,” the ratings agency said.

“2021 is also likely to see investment return to growth as well, as domestic businesses gear up for the recovery beyond 2021 alongside a return of foreign direct investment as the region continues to undergo a re-configuration of supply chains,” it added.

However, Fitch also noted that a new wave of Covid-19 cases could hurt the outlook for Malaysia.

 “The emergence of a second wave of infections, both in Malaysia and in a number of major economies around the world such as China and the US – which is already grappling with an aggressive second wave – remain the key downside risk to our 2020 and 2021 forecasts,” Fitch said.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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