Fitch Unit Slashes Malaysia S 2021 Gdp Forecast By Half Due To Runaway Covid 19 Cases Mco

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The Fitch Group unit said it was slashing the projection due to the third wave of Covid-19 infections, which began following the Sabah state election last year and continued to build to the point of requiring a renewed movement control order (MCO) in January.
(MMO) – Malaysia’s real gross domestic product (GDP) growth for 2021 is now forecast to be just 4.9 per cent versus the 10.0 per cent projected earlier, said Fitch Solutions Country Risk & Industry Research.
The Fitch Group unit said it was slashing the projection due to the third wave of Covid-19 infections, which began following the Sabah state election last year and continued to build to the point of requiring a renewed movement control order (MCO) in January. Fitch Solutions noted that Malaysia’s economy also fared worse in 2020 than it had predicted, contracting by -5.6 per cent for the full year instead of its forecast of -4.9 per cent.
“This revision follows the realisation of the downside risks we had pointed out in our comprehensive update on the growth, fiscal and monetary outlooks for Malaysia after the government had implemented lockdown measures to combat the third wave of Covid-19 infections.
“We expect a further extension of lockdown measures, and do not rule out further downward revisions to our growth forecast over the coming months,” Fitch Solutions said in a research note today.
Fitch Solutions explained that the MCO has severely curtailed domestic demand and would cause a renewed spike in unemployment as businesses faltered.
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