WB lowers Malaysia’s 2021 growth projection to 4.5 percent

Kuala Lumpur (VNA) – The World Bank (WB) has revised down Malaysia’s GDP growth forecast to 4.5 percent in 2021 from 6 percent estimated in March and 6.7 percent last December amid a dramatic resurgence of the COVID-19 pandemic beginning in mid-April.

The revision reflects the slower pathway towards suppression of the pandemic and the slower-than-expected vaccine rollout. The trajectory and pace of growth will depend on the duration and severity of movement restrictions, the containment of the pandemic, and the pace of the vaccine rollout, according to the “World Bank Malaysia Economic Monitor: Weathering the Surge,” launched on June 23.

The WB Group's senior economist Shakira Teh Sharifuddin said the country's economic recovery is being hindered by a resurgence in infections since mid-April, coupled with the re-imposition of the Movement Control Order (MCO) that is expected to have a significant impact on private consumption.

According to the report, Malaysia’s immediate priority must focus on the efficient and sustained management of the ongoing pandemic and its effects on individuals, households, and firms. Protecting the lives and health of citizens - and thereby preventing further strains on the country’s health system - is vital to ensure a safe resumption of economic activities and a prevention of a more protracted economic downturn.

Despite the challenges posed by the pandemic, external economic conditions are improving, helping to facilitate an economic recovery in the country. Exports are expected to jump to 11.2 percent in 2021, a significant rebound from the -8.9 percent seen in 2020, as global demand stabilises and investments in export-related activities continue to improve./.