RHB Investment Bank Bhd expects the impact of the Movement Control Order 3.0 (PKP 3.0) to be limited and maintain a Gross Domestic Product (GDP) projection of 5.4% year -on -year.
According to RHB's head of economics and market research, Dr. Sailesh K. Jha, the adaptability of Malaysian consumers and the strong external sector will be a balancing factor.
"Besides that, the possibility of further assistance by the government cannot be ruled out.
“As a result, we expect the USD/ringgit trading range to rise to 4.150-4.200.
"We maintain the view that the USD/ringgit will reach 4,220 by the second quarter of 2021 and 4,300 in the first quarter of 2022," he said as reported by The Edge.
Add Jha, PKP 3.0 is a temporary resistance.
"However, the gross projection and private consumption growth of GDP in the second half of 2021 is expected to be more modest than our previous assessment," he said.
Jha further explained that the Malaysian economy is in a good recovery phase in the first quarter of 2021 with private consumption and gross GDP projected to increase by -4.1% and 0.9%.
“The decline in the gross GDP projection is due to weak public infrastructure spending and public consumption spending along with strong imports.
“Private consumption and GDP investment increased in the first quarter of 2021.
"Therefore, if PKP 3.0 is not implemented, we should increase the 2021 GDP growth projection from 5.4% to around 6.0% due to higher -than -expected consumer spending," he said.
