The International Monetary Fund (IMF) has forecasted the Malaysian economy to rebound in 2021, with growth anticipated to rebound by 6.5 percent this year, fuelled by a solid turnaround in manufacturing and construction, and aided by the February rollout of the Covid-19 vaccine.
IMF in their report stated that the rebound is projected to be inconsistent due to the growing domestic and external demand.
“Inflation would recover to 2 percent and the current account surplus is on course to decline as demand for outbreak-related products starts receding and the rebound in domestic demand raises imports.
IMF also stated an intensification of the outbreak and materialisation of other risks could derail the recovery.
Malaysia’s open economy is also stated to be vulnerable to rising trade tensions and weaker-than-expected growth in trading partners.
Domestic policy instability can also dampen market trust and spending, reducing economic activity.
