Kuala Lumpur, Mar 31: The World Bank on Tuesday revised down Malaysia’s gross domestic product (GDP) growth projection this year sharply to -0.1 percent from 4.5 percent, to reflect the severity of the economic impact of the COVID-19 outbreak.
The World Bank said in a report that the ongoing COVID-19 outbreak has led to major negative impacts on Malaysia’s domestic economy including broad based disruption of economic activities.
“It marked reduction incorporates the slower growth momentum from the second half of 2019, but more significantly, it reflects the impact of the outbreak under a scenario where the current large-scale disruption of economic activities would extend for most of the year, before a partial recovery toward the year end,” the World Bank said.
According to the report, Malaysia’s net exports and investments are expected to experience a larger contraction in 2020, while private consumption is expected to grow at a much slower pace, from 7.6 percent in 2019 to 1.6 percent in 2020.
Meanwhile, government expenditure is expected to increase on various measures, including the economic stimulus package and other key expenditures and initiatives to mitigate the economic and health impact of the outbreak, but the bulk of stimulus activities are expected to be off-budget in nature.
The Malaysian government has recently announced economic stimulus packages totaling an 250 billion ringgit (58.14 billion U.S. dollars) injection into the economy to fight the economic fallout caused by the COVID-19 pandemic.
Malaysia’s economic growth slowed to 10-year low of 4.3 percent in 2019, as supply disruptions continued to affect the commodities and agriculture sectors.