Malaysia's economy to grow 6.7 pct in 2021: World Bank

Thursday, 2020-12-17 15:56:37
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People wearing face masks walk on a street in Kuala Lumpur, Malaysia, Dec. 16, 2020. (Photo: Xinhua)
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Malaysia's economy is expected to grow by 6.7 percent in 2021 following a projected contraction of 5.8 percent in 2020 caused by the COVID-19 pandemic, according to the World Bank's Malaysia Economic Monitor on Thursday.

"The successful containment of the third wave of COVID-19 infections and effective roll out and distribution of vaccine could lead to a faster-than-expected recovery in consumer demand, greater investor confidence, and consequently a more robust recovery in domestic economic activity in 2021," said the World Bank.

According to the report, Malaysia's private consumption is expected to return to growth of 7.4 percent in 2021 against a projected overall contraction of 4.8 percent in 2020.

Exports will also see stronger growth of 8.9 percent in 2021 if future waves of COVID-19 infections are held back.

World Bank also said there were signs of recovery, with Malaysia posting a smaller contraction of 2.7 percent in Q3 2020 compared to 17.1 percent in Q2 2020.

Fiscal measures like cash transfers and wage subsidies have boosted household spending with private consumption contracting 2.1 percent in Q3 2020 compared to 18.5 percent in Q2 2020, it said.

"However, the recent surge in COVID-19 cases and renewed movement controls could slow recovery down due to uncertainties surrounding the deployment of an effective vaccine and the robustness of a rebound in global growth that will influence the pace of economic recovery," the World Bank said.