Moody's Analytics: MCO 2.0 will impact Malaysia's economic growth this year

KUALA LUMPUR: The second Movement Control Order (MCO2.0) in key states with bustling economic activities would pose an impact on Malaysia’s economic growth this year, said financial intelligence company Moody’s Analytics.

Its chief Asia-Pacific economist Dr Steve Cochrane said the MCO, which is currently being implemented in key economic areas, namely Selangor, Kuala Lumpur, Penang, and Johor, accounted for 60 per cent of Malaysia’s economy.

The Klang Valley alone holds 40 per cent of Malaysia's economic activities, he noted, and stressed that Malaysia is not in a recession but the strict policies did create some risks of slowing the economy.

"There are a few countries that I worry about the most. We have one country that is Malaysia which we have classified as at risk. Malaysia is having trouble controlling the COVID-19 (transmission) after initially doing a pretty good job early on during the pandemic.

"The Philippines and Indonesia are two other countries that are having trouble managing COVID-19," he said during a webinar on the outlook for the global economy with a spotlight on the Asia Pacific recovery today.

Cochrane said the Philippines and Indonesia were having a hard time to controlling COVID-19 as both countries had not been firm in instituting strict social distancing practices of late.

"The Philippines was very strict for a long time, suffered so much from that but they have stopped some of the social distancing measures there, while Indonesia has never really instituted a very strict social distancing," he added.

Meanwhile, China, Vietnam, Taiwan, and New Zealand are currently seeing economic expansion, mainly due to the effective management of the COVID-19 pandemic.

"There is three really important factors that helped the differences across the Asia-Pacific region; one is how well each country has managed COVID-19 pandemic, second is how closely the countries are tide into the world trade patterns as well as supply chain, and third is the fiscal response, which has been very important across the entire region," said Cochrane.

Overall, Asia-Pacific is the strongest region globally and it led the way in economic recovery out of the COVID-19 pandemic moving forward. - Bernama

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