Monday, November 16, 2020

Malaysian Economy Will Recover Next Year

 The country's economic growth is likely to recover more firmly in 2021 with Bank Negara Malaysia (BNM) expected to reassess its original Coarse Country Output (KDNK) recommendation to +6.5 percent to +7.5 percent from +5.5 percent to +8.0 percent, driven by stimulus measures fiscal and monetary.

CGS-CIMB Securities Sdn Bhd as quoted by Bernama as saying, although the economic development tracks the flow in the period before Covid-19 until 2021, the basic reality of BNM recently shows that the establishment of monetary at this time is adequate.

"We repeat the recommended Overnight Base Level (OPR) at 1.75 percent by the end of 2021 and assume that the useful levels of this level marker will continue at that level," he said in an investigation note.

However, CGS-CIMB said the implementation of the second round of Conditional Movement Control Orders (PKPB) to stem the spread of Covid-19 since October 14 was expected to perpetuate the lockdown of the country's economy in the fourth tribe of 2020.

Meanwhile, Maybank Investment Bank Bhd (Maybank IB) is perpetuating the conservative true annual KDNK recommendation at -5.4 percent for 2020 and +5.1 percent in 2021 with prospects determined by elements such as pandemic, politics and basics.

Chief Economist, Suhaimi Ilias said, the true KDNK flow of Malaysia for tribes as of this year is parallel to a large economy, is rapidly developing and other overseas economies.

According to him, this includes the KDNK recommendation for the fourth ethnic group in 2020 Malaysia at -2.8 percent year on year which illustrates that there are challenges to the recovery process in the midst of the third wave of Covid-19, the second round of PKPB since mid-October, which will be continued until 9 Dis, 2020.

The PKPB now covers nine countries and three Union Territories which contribute 84 percent to Malaysian KDNK.

"Our recommendations for 2020 show that the KDNK is true for the fourth tribe this year, which will increase by -2.8 percent year after year, even though it is expected to continue to develop with a non-seasonal adjustment of +2.6 percent for tribe to tribe.

"This figure also assumes that the economic impact during PKPB is less successful than during PKP. BNM also suggests the depreciation effect of KDNK compared to PKPB now is between RM17 billion to RM22 billion compared to RM30 billion to RM40 billion during PKPB, "he said.