KUALA LUMPUR – Maybank Kim Eng Research has trimmed its gross domestic product (GDP) growth forecast for 2021 to 4.2% from 5.1% previously due to the tighter restrictions last month and total lockdown this month.
The research house said the downward revision was mainly due to lower growth for services and private expenditure as the global economic recovery and the still-sizeable impulse left from Budget 2021 and economic stimulus packages supported manufacturing, external trade and public expenditure growth.
Malaysia’s GDP contracted 5.6% last year compared to a 4.3% growth in 2019.
“We revised the budget deficit to GDP forecast to 6.8% from 6.0% previously (6.2% in 2020) plus keeping our ‘no OPR (Overnight Policy Rate) change’ view,” it said in a note today.
Malaysia entered into another round of movement control order (MCO 3.0) as daily new Covid-19 cases continued to rise, forcing businesses to temporarily stop their operations.
However, the food and beverage industry along with health services, water and energy utilities, transport – including ports and airports – were among the essential services sectors allowed to operate during MCO 3.0, which began on June 1 and has recently been extended till June 28.
As of yesterday, Malaysia recorded 4,949 new Covid-19 cases, bringing the total number of infections in the country since the pandemic began to 662,457 cases with 3,968 fatalities.
Separately, CGS-CIMB Securities Sdn Bhd kept its GDP forecast at 4.4% for 2021, incorporating three phases of lockdown.
“We expect the impact from the extension of the Phase 1 lockdown to be offset by greater leniency in sectors allowed to operate than our initial assumption and support from the Pemerkasa Plus aid package,” it said.
According to the stockbroking firm, if the first phase was successful, Malaysia would move on to the second phase lasting four weeks and allow the reopening of certain economic sectors that do not involve large gatherings and where physical distancing can be maintained.
CGS-CIMB said after Phase 2, it would move on to {hase 3, when almost all economic activities could resume, although physical presence at the workplace would still be controlled. – Bernama, June 15, 2021
