Malaysia’s economic activity is expected to gradually improve in the second half of the year (2H 2020) after COVID-19 containment measures are eased and the domestic Movement Control Order (MCO) is lifted, said Bank Negara Malaysia (BNM).
BNM governor Datuk Nor Shamsiah Mohd Yunus said that would allow a gradual resumption of economic activities in the country and a greater demand in the services sector.
“In 2H 2020, the stimulus measures would provide a lift to the growth of consumption and we are going to see improvement in global growth, as more and more countries will reopen their economies
Nor Shamsiah said the improvement in growth is expected in 2H 2020, as the country resume economic activities under the less restrictive Conditional Movement Control Order (CMCO) from May 4-June 9, 2020.
“The growth should accelerate in 2021, especially when the country’s trading partners have also resumed their economic activities,” she added.
Meanwhile, she said the pandemic had accelerated the needs of technology due to the needs of social distancing and expects electrical and electronics (E&E), as well as healthcare sectors, to play critical roles in terms of structural reforms to reduce vulnerabilities in the country.
“This is because the E&E sector would provide immense opportunities in areas such as remote working, virtual learning, e-commerce, online shopping and online entertainment,” she said.
She said, as for the healthcare industry, the country industry players are also major producers in medical consumables, such as manufacturers of high-tech medical devices.
Earlier today, Nor Shamsiah said Malaysia’s economy expanded moderately at 0.7 per cent in the first quarter of 2020, the slowest pace since the third quarter of 2009 (-1.1 per cent) due to COVID-19 pandemic and the implementation of MCO.
While acknowledging the impact from COVID-19 would be severe, she anticipates a deep contraction in Q2 2020 against 0.7 per cent growth in Q1 2020.
“What we are certain is that the Q2 2020 would experience quite a deep contraction before bottoming out, and picking up again as we enter Q3, 2020,” she said but declined to offer any economic growth forecast for the full year 2020.