The International Monetary Fund (IMF) expects Malaysia’s real gross domestic product (GDP) to rise by 9% in 2021, making it the fastest among ASEAN-5 nations that are projected to register a combined GDP growth of 7.8%.
Aside from Malaysia, other nations in the ASEAN-5 are Indonesia, the Philippines, Vietnam and Thailand which are set to expand by 8.2%, 7.6%, 7% and 6.1%, respectively.
The Washington-based organisation’s projection for Malaysia is higher compared to the 5.8% growth forecast by Fitch Ratings, reported Bernama.
For this year, IMF believes Malaysia’s economy will contract 1.7%, as the GDP for the ASEAN-5 shrinks 0.6%.
As for global growth, IMF expects a rebound of 5.8% in 2021 compared to the 2010 global growth of 5.4% from -0.1% in 2009 after the global financial crisis.
It can be recalled that for 2020, IMF projected a -3% global growth mainly because of the COVID-19 pandemic.
“The advanced economy group is forecast to grow at 4.5%, while growth for the emerging market and developing economy group is forecast at 6.6%,” said IMF.
The organisation notes however, that the rebound expected for 2021 is critically dependent on the fading of the pandemic in the second half of 2020, which will allow containment efforts to be gradually scaled back and restore consumer and investor confidence.
Considering that significant economic policy efforts have already been taken across the world, the projected recovery assumes that such efforts are effective in preventing widespread firm bankruptcies, system-wide financial strains and extended job losses.
Nonetheless, the GDP level by the end of 2021 is expected to remain below the pre-virus baseline, both in advanced and emerging market as well as the developing economies.
“Some aspects that underpin the rebound may not materialise, and worse global growth outcomes are possible — for example, a deeper contraction in 2020 and a shallower recovery in 2021 — depending on the pathway of the pandemic and the severity of the associated economic and financial consequences,” it explained.