Bank Negara Malaysia has projected Malaysia’s Gross Domestic Growth to be between -2.0 percent and +0.5 percent this year.
The estimation comes during a global crisis caused by the coronavirus outbreak which has disrupted supply chain and caused a weak global demand.
In a press release by the central bank, the necessary move to announce the Movement Control Order (MCO) along with other measures to contain the spread is expected to dampen economic activity temporarily.
BNM has pointed out that Putrajaya’s stimulus package will help to cushion the economic fallout and along with the announced stimulus packages, the central bank’s financial measures will provide sizable support to both households and businesses.
“These measures are expected to add 2.8 percentage points to 2020 GDP growth. Also supporting growth is the ongoing large-scale infrastructure projects, which are expected to provide an additional 1 percentage point lift to growth in 2020,” BNM stated in the release.
However, the central bank has cautioned for significant uncertainties surrounding the growth outlook, with both upside and downside risks to the outlook.
Downside risks are expected to stem from more prolonged and wider spread of Covid-19 globally and domestically, recurring commodities supply disruptions and tighter financial conditions following heightened volatility in financial markets.
“However, there are also upside risks, emanating from potentially larger-than-expected impact from the pro-growth measures, faster normalisation in activity amid pent-up demand and better-than-expected global economy, arising from the various stimulus measures,” BNM highlighted.
The central bank further expects the Malaysian economy to rebound in 2021, in line with the projected global recovery.