MARC: Malaysia economy to rebound in 2021, growth will remain below potential
Malaysia’s GDP growth, which tumbled to 0.7% y-o-y in 1Q2020 is expected to decelerate further in 2Q2020 as the full impact of the Movement Control Order (MCO) is reflected in weaker private consumption on top of the lacklustre pace of investments. While the 1Q2020 growth statistics generally came in above market expectations of somewhere between -1% and -2%, the strength of the economy in the first three months of 2020 was largely supported by robust consumer spending prior to the MCO period. Consumer spending grew at a strong pace of 6.7% in 1Q2020. Such growth pace, however, is likely unsustainable given the impact of COVID-19 on consumer sentiment and the labour market in the near term.
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