Malaysia’s 2021 GDP Projection Halved as Downside Risks Previously Anticipated by Fitch Materialise

Fitch Solutions Country Risk & Industry Research (Fitch Solutions) has slashed its estimate of Malaysia’s gross domestic product (GDP) growth for 2021 to 4.9%, from 10.0% estimated previously. The revision comes as Fitch Solution’s previously predicted downside risks pertaining to economic growth, monetary and fiscal performance for Malaysia materialised. This followed the lockdown measures imposed under the latest movement control order (MCO) put in place in January 2021, to control the third wave of COVID-19 in Malaysia.

Why it matters?

The latest MCO has significantly cut down domestic demand, which could cause a renewed spike in unemployment. Although the MCO has controlled the spread of COVID-19, Malaysia’s pandemic situation...