World Bank Expects Covid 19 To Have Large Impact On Malaysia S Gdp

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Malaysia’s gross domestic product (GDP) is projected to contract by 0.1 percent to 4.6 percent this year amid negative impact brought by Covid-19, according to the World Bank
Its senior economist, finance, competitiveness, and innovation global practice, Smita Kuriakose, said the impact on Malaysia’ economy was likely to be large looking due to Covid-19’s adverse impact on foreign direct investment (FDI), commodities and tourism as well as domestic shocks due to the movement control order (MCO)
Malaysia is also among the economies highest connected to global supply chains
Globally, she said, trade had declined on par with most acute phase of the global financial crisis in 2008/2009
Since the coronavirus outbreak started up to March 23, there was the largest outflow from the emerging markets ever recorded at US$83 billion (RM357 billion), while global direct foreign investment was likely to drop by 30 to 40 percent this year, she said
Meanwhile, 75 million jobs are at risk in the travel and tourism sector, with two-thirds being in Asia
“We must acknowledge the fact that recovery would not be uniform across sectors and even regions,” she said during a web-based seminar hosted by not-for-profit think-tank Research For Social Advancement (Refsa) titled “Flattening the Recession Curve: Saving SMEs and Preserving Jobs”
She said ample initiatives need to be launched to helping the Small and Medium Enterprises (SMEs) amid the disruption in supply chain and demand
According to Smita, local SMEs particularly still lag behind in utilising the digital platform and this needs to be addressed
While the government had shown its commitment to react quickly and allocated substantial resources to respond to the outbreak, recovery was likely to take years, she said
Bank Negara Malaysia (BNM) announced its latest GDP growth projection for 2020 last week, estimating a range of -2 percent to 0.5 per cent. This is down from 2019’s 4.3 percent growth
“Once people’s confidence is restored, economic activity will rebound. And you will have all the pent-up demand and that will also drive recovery eventually,” BNM governor Nor Shamsiah Yunus said
The central bank said the domestic growth was expected to improve towards year-end and subsequently in 2021 as risks from the pandemic subsided, in line with the projected recovery in the global economy
In 2019, Malaysia’ GDP grew at 4.3 per cent
- Bernama

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