Analysts Cut Malaysia’s GDP Forecast For 2021

June 1, 2021

Analysts Cut Malaysia’s GDP Forecast For 2021

While the impact of Malaysia’s two-week full lockdown is expected to be less severe than that witnessed during the first movement control order (MCO 1.0) last year, analysts have lowered their growth projections for 2021 gross domestic product (GDP) to between 4.4% and 5.4%.

The Sun Daily reported that CGS-CIMB expects Malaysia to register RM1 billion in economic loss per day for the two-week lockdown from 1 to 14 June, milder than the RM2.4 billion daily loss seen last year. It expects the impact to narrow to RM500 million per day during the limited reopening of phase 2.

“Imputing these assumptions for the six-week phase 1 and phase 2 and the additional month of phase 3 (10% capacity cut or RM400 million per day) leads to downside risk to our GDP outlook but we do expect some degree of policy support as well as pent-up demand to materialise when these restrictions are eventually relaxed,” according to the research house.

Meet Malaysia’s Top 10 Real Estate Entrepreneurs In 2021!

To reflect this development, CGS-CIMB lowered its 2021 GDP forecast for Malaysia to 4.4% from 5.7%.

The research house expects the government to introduce stimulus of between RM20 billion and RM30 billion to support households and businesses affected by the restrictions.

PublicInvest Research, on the other hand, expects the two-week lockdown within the Klang Valley to slash 0.8% off the economy, bringing this year’s growth to 5.4%. And extending the lockdown to four or eight weeks could reduce GDP by between 1.4% and 2.9%, which works out to 4.7% and 3.1% growth, respectively.

“We are concerned that the improvement in labour market conditions may be delayed by the constant MCOs and resultant strains on businesses, now made worse by the implementation of a total lockdown,” said PublicInvest Research, citing Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob, who shared that 2.8 million people may lose their jobs in case the government implement a total lockdown.

Nonetheless, the research house believes there will be no economic meltdown similar to that seen last year, noting that the period coincided with a global lockdown that decimated demand-supply dynamics.

Meanwhile, MIDF Research also expects the impact of the total lockdown to be less severe than last year’s MCO 1.0 lockdown. It also revised its earlier projection of 6.2% GDP growth to 4.6%.


Check out these latest project reviews today! Or read our helpful Guides to learn all about the various property buying, selling and renting tips!


You may also like these articles

World Bank cuts 2020 GDP forecast for Malaysia to -4.9%

The World Bank expects Malaysia’s gross domestic product (GDP) to contract by 4.9% this year, which is bigger than its earlier forecast of a 3.1% contraction, on the back of a sharper-than-expected

Continue ReadingSeptember 30, 2020

RHB revises Malaysia’s GDP growth forecast in 2021 down to 6.3%

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

Continue ReadingDecember 10, 2020

Malaysia's GDP To Expand 5.1% In 2021, Says Economist

Maybank Investment Bank Bhd (Maybank IB) expects Malaysia’s economy to expand by 5.1% this year, following an expected contraction of 5.4% in 2020.Suhaimi Ilias, Chief Economist of Maybank IB, belie

Continue ReadingJanuary 6, 2021

Malaysia's GDP Growth To Stand At 0.5% In Q1 2021, Says Moody's Analytics

The gross domestic product (GDP) of Malaysia is expected to grow by 0.5% quarter-on-quarter during the first quarter of 2021 (Q1 2021), a reversal of the 0.3% contraction registered in the fourth quar

Continue ReadingMay 11, 2021

BNM: Malaysia GDP Remains On Track For 6% To 7.5% Growth In 2021, Despite 0.5% Drop In Q1

While Malaysia’s gross domestic product (GDP) declined by 0.5% in the first quarter of 2021 (Q1 2021), it remained on track to hit the 6% to 7.5% growth forecasted by Bank Negara Malaysia (BNM) for

Continue ReadingMay 12, 2021