Malaysia's Gross Domestic Product (GDP) is expected to increase again in a positive range of 4.0% to 5.0% in the fourth quarter of 2020 due to small and widespread increases involving all sectors, especially manufacturing.
Chief Executive Officer (CEO) of Inter-Pacific Asset Management Sdn Bhd, Datuk Dr. Nazri Khan Adam Khan also described Malaysia as being on track to achieve the 2020 full year target of -3.5% to -5.5% based on the third quarter performance of 2020 at - 2.7% which is a lower contraction than most economists expect to follow -17.1% in the second quarter of 2020 .
"Although we do not know what will happen next involving the Covid-19 pandemic, there are signs that the negative impact of the virus transmission is not as expected due to productivity recovery amid the re-implementation of the Conditional Movement Control Order (PKPB) since mid-October.
"In this regard, we project GDP for the full year 2020 will reach -4%, in line with the projection of -3.5 to -5.5% by Bank Negara Malaysia (BNM)," he was quoted as saying by Bernama.
He also targeted the GDP growth to recover to 6.5% with most of it driven by the 2021 Budget worth RM322.5 billion which also involves the largest development allocation of RM69.0 billion.
"The 2021 budget places great emphasis on projects with high multiplier effects or impacts such as Mass Rapid Transit 3 (MRT3) and the Pan Borneo Highway which are expected to inject positive impact as early as the first quarter of 2021," he said.
Apart from that, he said the unemployment rate decreased to 4.6% in September 2020 from a high of 5.3% in May 2020, could also help boost the country's economic growth.
"For me, the labor market is the core to drive domestic demand and the government should focus on the employment environment in the country to ensure sustainable economic growth in the future," he said.
He is also optimistic that the unemployment rate in Malaysia can be reduced to the previous level of Covid-19 which is 3.0% in the next two years due to the use of Covid-19 vaccine starting next year as well as various stimulus packages worth RM305 billion aimed at reducing the negative impact of the pandemic.
Commenting on the moratorium initiative, he said the government had implemented adequate measures under the stimulus plan to ensure a small increase in the people's disposable income.
"In my opinion, the act of reintroducing the comprehensive moratorium is the best and best option for consumers as well as having a wide impact on most sectors such as automotive and real estate despite the opposite situation for banks.
“I believe the government has done more than enough such as cash assistance initiatives for the B40 and M40 groups and the withdrawal of Employees Provident Fund contributions through the i-Lestari program. Apart from that, tax-related measures for businesses are also sufficient in an effort to further increase the people's disposable income, "he said.
