KUALA LUMPUR (April 3): Against the backdrop of weak global demand, Malaysia’s economy will nevertheless be supported by growth in private and public consumption, said Bank Negara Malaysia (BNM).

According to the central bank, private consumption is expected to grow 4.2%, lower than a recorded 7.6% growth in 2019. Household spending will be supported by stimulus measures and subdued inflation, BNM said during a virtual press conference with media earlier.

Growth in public consumption is expected to be 5.9%, higher than a recorded 2% growth last year.

The central bank has forecasted Malaysia’s economic growth this year to range between -2% and 0.5%.

Meanwhile, weak external demand will affect net exports, with a forecasted negative growth of -13.6% in 2020, while imports are forecasted to record a negative growth of -11.9%, BNM said.

Investments will also be affected by weak demand and high uncertainty this year. BNM forecasts private investment to grow -9.7%, while public investment will be negative this year at -7.5%. However, it noted that continued progress of infrastructure projects will support investment activity.

Additionally, domestic output is expected to decline across all sectors, except for services, BNM said.

In 2020, the services sector is expected to grow 2.3%, lower than its 6.1% growth in 2019. Although tourism-related and consumer services will be impacted by the movement control order (MCO), it will nevertheless be cushioned by the government’s stimulus measures, BNM noted.

The manufacturing sector will also be hit by lower global demand, supply chain disruptions and constrained capacity during the MCO, with a projected negative growth of -8.6%, said BNM.

Mining & quarrying is projected to record a negative growth of -4.2%, while agriculture is expected to contract to -2.9% and construction to -1.9%, it said.

For more stories on BNM's annual report, click here.