Illustrative image (Photo: https://www.theedgemarkets.com/) Hanoi (VNA) – Penang, Malaysia’s technology hub, is helping drive an economic recovery that could see the country bounce back faster than any of its peers in Southeast Asia, said experts.
The northern state drew 6.8 billion ringgit (1.6 billion USD) of foreign direct investment in the first quarter, almost two-thirds of the country’s total. It attracted new projects even as the pandemic disrupted global supply chains and dampened demand worldwide. Approved investments in Penang in Q1 nearly doubled from the previous three months, according to the InvestPenang investment promotion agency.
Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. in Singapore, said that Malaysia plays a key role in the global semiconductor supply chain, and has benefited from the tentative recovery in the electronics cycle.
The Malaysian government has announced nearly 70 billion USD in stimulus -- equal to about 20 percent of GDP -- to cushion the effects of the pandemic. However, unemployment has surged to 5.3 percent, the highest since at least 1990.
Early signs of a rebound are evident in Malaysia’s exports, which climbed 8.8 percent from a year ago, driven by a 20-month high in electronics sales.
Analysts believe that Malaysia will overcome the difficult period caused by the COVID-19 pandemic better than most other countries in Southeast Asia. The World Bank (WB) predicted that Malaysia's economy will decrease by 3.1 percent in 2020 before increasing 6.9 percent in 2021. Meanwhile, the International Monetary Fund (IMF) projected that Malaysia’s economy will shrink 3.8 percent this year before growing 6.3 percent next year.
Fitch Ratings said that the demand of Malaysia's middle class, making up 77 percent of total households, will help offset the decline in demand in overseas markets. CGS-CIMB believes that Malaysia's strong monetary and fiscal measures will help its economy recover faster than other Southeast Asian countries./.
VNA
