The World Bank has revised its 2021 economic growth forecast for Malaysia to 4.5%, down from its earlier forecast of 6.0%.
The downgrade comes after the country witnessed a significant resurgence in COVID-19 cases from mid-April this year, reported Bernama.
In its recently launched Malaysia Economic Monitor: Weathering the Surge report, World Bank said the hike in infections raised concerns on the overall capacity of the country’s health system as well as the impact of the ongoing cycle of closing and opening the economy on firms and households.
Shakira Teh Sharifuddin, Senior Economist for Macroeconomics, Trade and Investment at World Bank, expects the COVID-19 pandemic and the movement restrictions imposed by the government to have a near term impact on Malaysia’s economy.
“In the short term, the focus is on containing the pandemic and saving the lives as well as livelihoods,” she said during the virtual launch of the Malaysia Economic Monitor June 2021 Edition.
“Over the medium term, it is important to take the lesson learned from the pandemic and undertake strong (measures) such as rebuilding fiscal buffers and deepen as well as strengthen the social protection system,” she added as quoted by Bernama.