The country's Gross Domestic Product (GDP) growth forecast is not lowered further despite the sharp increase in Covid-19 infection in the country.
Therefore, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz was quoted by Bernama as saying that the 2020 growth projection remains between -5.5 per cent and -3.5 per cent.
"The second wave is very concentrated and more than 60 percent is under control. We do not enforce the Movement Control Order (PKP), so, all business activities are allowed to continue, "he said in an interview aired on BFM radio station today.
He, however, admitted that for this year, Malaysia, along with 150 other countries, is experiencing a recession.
But by 2021, he said the economy was recovering and Malaysia's GDP growth was expected to be around 5.5 per cent to 8.0 per cent - a forecast in line with stronger GDP forecasts by the World Bank and the International Monetary Fund (IMF).
Tengku Zafrul said the government announced various stimulus packages ending this year and continued to review various ways to protect the lives of the people and focus on the momentum of recovery in the upcoming 2021 Budget.
"Of course, it is important for us to build resilience to ensure that Malaysia can withstand future economic shocks," he added.
Touching on the growth of bank loans, it is expected to recover next year in line with positive GDP growth, the finance minister said.
“Bank loans are very closely linked to GDP. GDP growth slowed in the second quarter to a 17 per cent contraction, but I expect it to bounce back in the second half of this year, especially in the fourth quarter, ”he said.
Tengku Zafrul also expressed hope that the country's economy will return to the level before the emergence of Covid-19 in 2021.
"Next year will be a transition year for us. We can return to the level of GDP 2019 in 2021, ”he said.
He added that the projections are in line with the banking industry's targets for higher loan growth next year, driven mainly by key segments such as mortgages, small and medium enterprises and commercial banking.
