Maybank Investment Bank Bhd (Maybank IB) expects Gross Domestic Product (GDP) for the third and fourth quarters of this year to contract to -3.5 per cent and -1.9 per cent year-on-year respectively following the economic downturn in the second quarter.
According to his research notes, this will make the full year recession at -5.4 percent.
Bernama reported that consumer spending indicators for the third quarter of 2030 (3Q20) also increased and reflected better private consumption in the quarter.
Maybank IB said household loan applications and approvals as well as credit card transactions had increased again in 3Q20.
“The increase in household loan growth in the three months until last September also reflects the impact of stamp duty, Property Gains Tax and sales tax exemption under the National Economic Regeneration Plan (PENJANA) package to stimulate residential and automotive sales for a period of 6-18 months. come.
"This has led to an increase in loans for the purchase of residential properties and passenger vehicles," he said.
According to Maybank IB, the risk to the projections, especially in the fourth quarter of 2020, is the emergence of a new wave of COVID-19 infection cases since the end of last September, followed by the targeted implementation of movement control orders.
"This includes the Conditional Movement Control Order (PKPB) which is being implemented in Sabah, Selangor and the Federal Territory of Kuala Lumpur, Putrajaya and Labuan which represents up to 47 percent of GDP," said the firm.
