Friday 29 Mar 2024
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KUALA LUMPUR (May 13): Bank Negara Malaysia (BNM) will provide a revised economic forecast in the second half of the year (2H20) once there is more clarity in the data and outlook, said its Governor Datuk Nor Shamsiah Mohd Yunus. 

Speaking at a media briefing via a virtual press conference here today, Nor Shamsiah noted that it will not be beneficial to offer a new forecast for the whole year as there are still so many uncertainties at this point. Thus, a meaningful forecast is difficult.

“We will provide a revised forecast in the second half of the year once there is more clarity in the data and outlook, especially in our major trading partners,” said Nor Shamsiah.

Malaysia’s gross domestic product (GDP) growth for the first quarter of this year has moderated 0.7% — the lowest level since the global financial crisis or specifically the third quarter of 2009 at an economic contraction of 1.1%.

Nor Shamsiah told the media that the growth was affected by slower economic activity arising from Covid-19 and containment measures implemented globally and domestically.

Looking ahead, she pointed out that the country’s economic growth will continue to see a downtrend and a contraction in the following quarter on the back of the longer duration of containment measures.

However, she believes that economic activities will gradually improve in the second half of this year and will see a rebound in 2021 on the back of less restrictive containment measures or conditional movement control order (CMCO) implemented in the country, stimulus measures and improved external demands.

The CMCO has been extended to June 9 as announced by the prime minister over the weekend.

Moreover, the continuation of large transportation projects, such as MRT (Mass Rapid Transit), SUKE (Sungai Besi - Ulu Kelang Elevated Expressway), and DUKE3 (Setiawangsa-Pantai Expressway), as well as the recovery in commodity production will also play a part in supporting GDP growth in the 2H20, said Nor Shamsiah.

She added that the implementation of new investment projects such as the National Fiberisation and Connectivity Plan, and demand for technology and healthcare will also give a boost to the country’s economic growth in 2021.

Previously, BNM had projected the country’s GDP growth to be between -2% and 0.5% this year.

She highlighted that the uncertainty from Covid-19 has posed challenges for central banks everywhere, in making precise numerical forecasts.

“Since our last forecasts made on April 3, much has changed in terms of assumptions, the MCO was extended for four weeks to almost two months now. We are also in relatively early stages of reopening the economy under the CMCO with implementation issues being resolved as industries prepare and adjust to new SOPs (standard operating procedures),” she said.

On the local front, Nor Shamsiah noted that the low commodity prices also pose an added challenge. “The path of recovery is, of course, going to be highly dependent on the trend of Covid-19, not just in Malaysia but globally,” she said.

 

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