IMF projects Malaysia’s economy to grow 7% in 2021
The International Monetary Fund (IMF) said on Friday that it was projecting the Malaysian economy to rebound by seven per cent in 2021, supported by both domestic and external demand. Exports, which were propped up in 2020 by strong pandemic-related demand for personal protective equipment and electronic products, will continue to underpin growth, said the […]
The International Monetary Fund (IMF) said on Friday that it was projecting the Malaysian economy to rebound by seven per cent in 2021, supported by both domestic and external demand.
Exports, which were propped up in 2020 by strong pandemic-related demand for personal protective equipment and electronic products, will continue to underpin growth, said the IMF in a statement.
According to the international financial institution, recovery will be uneven across sectors and inflation will rise to around two per cent in 2021 as electricity tariff rebates expire, fuel prices rise and domestic demand recovers.
It also said the risks to the growth outlook were to the downside, adding that intensification of the pandemic could derail recovery.
“Malaysia’s highly open economy is vulnerable to escalating trade actions, weaker than expected trading partner growth and global financial shocks.
“ Domestic policy uncertainty also poses risks to recovery,’’ it said.
On the upside, it noted that faster than expected availability of COVID-19 vaccines could accelerate recovery.
The IMF also said the Malaysian economy entered the pandemic from a robust economic position, but the shock had been severe and was expected to cause a 5.8 per cent decline in real gross domestic product in 2020.
