MARC Lowers Malaysia’s 2021 Growth Forecast Further on Account of Continued Mobility Restrictions

The Malaysian Rating Corporation (MARC) has cut its growth forecast for Malaysia’s gross domestic product (GDP) to 3.9% for 2021, from its previous estimate of 5.1%. The prolonged nationwide lockdown measures, along with political instabilities are expected to delay Malaysia’s attempt at a recovery even further. The Malaysian economy is anticipated to reach pre-pandemic GDP levels by late 2022, at the earliest. This may extend further should mobility restrictions continue as is.

Why it Matters?

The expectation of a prolonged recovery is likely to also be a result of increased insolvencies and higher retrenchment. In addition, political uncertainties are likely to take a further toll on business and consumer sentiment, undermining investment...