Speaking at the Standard Chartered 2021 Global Research Briefing, Edward Lee, Chief Economist of Standard Chartered South Asia, and ASEAN, said most economies will be recovering within this year and Malaysia is one of them.
With a global synchronised lockdown that took place in 2020, economies in the world took a great hit with only China and Taiwan began this year with gross domestic production (GDP) activity above pre-Covid levels.
Malaysia can presumably expect growth even if the recovery may be gradual and uneven. The growth will not spiral down but there will be a delay in the rise as uncertainties such as the second Movement Control Order (MCO 2.0) and the state of emergency declaration still cloud the country.
Standard Chartered foresees the country’s GDP to rebound from -5.8 percent, in 2020, to 7.5 percent for this year.
“Prior to this, we always look at the annual growth numbers but, when Covid-19 happened, we must seek upon the sequential growth number. Thus, we must look at the sequential growth to know exactly the numbers are for the country,” he said.
“The average sequential growth in the second half of 2021 will be higher than in the first half as for most economies are projected on the vaccines roll-out and the economic stimulus package by the government,” Edward said.
The Employees’ Provident Fund (EPF) withdrawal contributes to consumer’s spending as well as vaccines and other stimulus previously done by the government. This will result in consumers looking to spend on medium term investments too.
Notably, 2020’s global lockdown has affected Malaysia’s exports by a large margin.