RHB Banking Group has revised its 2021 growth forecast for Malaysia’s economy downwards to 6.3% from 7% previously.
This comes as it expects the country’s economic recovery to remain challenging in the next few quarters due to the prolonged COVID-19 pandemic, reported The Edge.
Dr Sailesh Kumar Jha, Chief Economist of RHB, said RHB’s revised growth forecast for Malaysia GDP next year is lower than the 6.8% Bloomberg consensus forecast.
He made the statement at the launch of RHB’s “Path Finder — Separate the Noise from Reality” report.
On the domestic front, the 60-page report noted that Budget 2021 indicates the government’s continued support for public investment and private consumption.
“Nevertheless, while the fiscal and financial support could offset part of the [GDP] decline, the dampening effect of the pandemic may still persist,” wrote RHB Economist Ahmad Nazmi Idrus.
With this, he expects Bank Negara Malaysia to keep the overnight policy rate at 1.75% into next year.
“The possibility of more stringent social measures is negative for growth outlook ahead. However, support in the form of large-scale fiscal spending alongside financial backing should be substantial,” said Ahmad Nazmi.
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