KUALA LUMPUR: The World Bank Group is reviewing Malaysia’s economic growth again for 2020, measured by gross domestic product (GDP), given the 2019 novel coronavirus (Covid-19) outbreak, said its representative to Malaysia and country manager Firas Raad.
This marks the second time that the group reviews the country’s economic growth for this year, after it revised down Malaysia’s GDP growth to 4.5% for 2020 from 4.6% previously due to weaker-than-expected investment and export growth. Notably, World Bank’s previous revision of the GDP growth was before Covid-19 hit the headlines.
However, Firas noted it is still studying the impact of the virus to the Malaysian economy due to the evolving situation, adding that it has not decided on the new GDP numbers.
“It’s natural to think that a revision of the GDP growth will be happening. We are still looking at the impact and effects of the Covid-19 outbreak. We are working on it and hopefully we will let you know soon, ” he told reporters during the sidelines of the report launch ‘A Practitioner’s Guide to Innovation Policy’.
Meanwhile, Firas pointed out that the World Bank expected the Covid-19 outbreak to impact the country’s tourism sector, foreign direct investments (FDIs), supply chain and commodity prices including palm oil, oil and gas.
“Malaysia is a trading country and China is one of its biggest partners. There will be an effect but to what extent, we are still examining that, ” he said.
On the upcoming stimulus package, aimed at mitigating the impact of Covid-19, Firas said the government has to be careful not to be overly comprehensive, adding that it must be “selective and strategic” in how it would support industries affected from the crisis.
“The government is still in a difficult position because we don’t know where we are in this crisis or whether it has peaked or it hasn’t.
“It needs to calibrate how much support it provides as to whether it does one round of stimulus now or it has to come back to do another round, ” he pointed out.
Recently, Prime Minister Tun Dr Mahathir Mohamad announced that the economic stimulus package would be announced next week on Feb 27.
Moreover, Firas said the tourism sector, FDIs and the small and medium enterprises (SMEs), would need support in the stimulus package.
On Monday, Entrepreneur Development and Cooperatives Minister Datuk Seri Mohd Redzuan Yusof also shared some insights that the stimulus package would benefit SMEs, especially those in the tourism and manufacturing sectors.
SMEs make up around 98% of all firms in Malaysia and contributes around 37% to the GDP.