(12 July): Malaysia’s economic growth prediction for this year has been lowered because to movement restrictions against Covid, according to the country’s finance minister, who indicated that the government may forecast growth of roughly 4%. While there is optimism that the current rise in cases will be handled and lockdowns may be lifted, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz stated Monday in an interview with Bloomberg TV that the government still expects to cut its GDP forecast for 2021.
Tengku Zafrul said, “We’re in the process of modifying to a lower estimate and will publish the actual amount once we have data from the ground.” Tengku Zafrul, when asked if the forecast may be trimmed to approximately 4%, said it could be “in the range you specified.” The administration has already stated that the forecast, which is now at 6%-7.5 percent, will be revised next month.
Prime Minister Tan Sri Muhyiddin Yassin is under increasing pressure, with lockdowns costing the economy RM1 billion a day and only 10% of the people completely vaccinated, while the largest party in his ruling coalition recently dropped its support for him. On Saturday, there were a total of 9,353 new Covid cases, with the Klang Valley — which encompasses Kuala Lumpur — accounting for around 60% of the total.
Tengku Zafrul was named as Malaysia’s National Recovery Plan’s coordinating minister last week, with responsibility for overseeing the strategy’s implementation, including intervention measures.
Other major takeaways from the interview include:
As the government borrows more to support its economic aid packages, the debt ceiling may have to be lifted to 65 percent, up from 60 percent now.
The fiscal deficit is expected to rise to 6.5 percent -7 percent this year, up from the predicted 6 percent./n
