MARC Lowers 2021 Economic Growth Forecast for Malaysia; 2020 GDP Worst Since Asian Financial Crisis

Malaysian Rating Corp (MARC) has lowered its economic growth projection for Malaysia in 2021, to 5.6%, compared to its estimate of 6.4% previously made in January 2021. This follows an expected 5.7% contraction in Malaysia’s gross domestic product (GDP) in 2020, anticipated to be the worst economic decline since the 1997/98 Asian Financial Crisis. In comparison, Malaysia’s Finance Ministry forecasts GDP to contract by 4.5% for 2020 and positive economic growth of between 6.5% and 7.5% for 2021.

The estimated decline in GDP in 2020 incorporates the effects of the COVID-19 pandemic, with a 5.6% contraction in domestic demand, with private and public investment expected to fall by 4.2% and increase by 4.6%, respectively, according to MARC. MARC also estimates private a...