PETALING JAYA: The World Bank has projected that Malaysia’s gross domestic product will grow by 6.7% next year following a 5.8% contraction in 2020.
In its latest Malaysia Economic Monitor report, it attributes this recovery to the low baseline established by 2020’s contraction, the expected improvement of export activity and an increase in private consumption and investment.
The group said the strength and timing of this recovery hinge on the availability of a working vaccine for Covid-19 and the recovery of other countries, as external demand would depend on their economic health.
Speaking during the online presentation of the report, Minister in the Prime Minister’s Department (Economy) Mustapa Mohamed said the end of the year has been more difficult than initially expected.
“In the middle of the year, the expectation was that there would be a gradual economic recovery in this quarter, but it is turning out that is not going to be the case.
“That’s got to do with the third resurgence of the Covid-19 pandemic and the imposition of movement restrictions in October.”
The report said that private consumption is expected to increase to 7.4% next year after dipping by 4.8% in 2020, as consumers gain confidence resulting from better Covid-19 management and mitigated health risks.
Similarly, the World Bank expects demand for Malaysian exports to improve by 8.9%, as the country’s regional neighbours and China experience recovery of their own, which is expected to translate into better demand for goods.