PETALING JAYA: Malaysia expects to see strong economic recovery by the year's end despite a lower 4.5% growth projection by the World Bank, said Datuk Seri Mustapa Mohamed.
He said this depends on whether the government's measures - including rapid vaccination and lockdowns - are successful in reducing the number of cases.
Speaking at the virtual launch of the World Bank's latest Malaysia Economic Monitor (MEM) entitled “Weathering the Surge” on Wednesday (June 23), the Minister in the Prime Minister's Department said that this comes following MEM's downgrade of its earlier 6% economic growth forecast for Malaysia to 4.5% in 2021.
The report acknowledged that the recent dramatic resurgence of Covid-19 cases in May and slow rollout of the vaccination due to supply issues, had impacted the economy.
The government had projected a 6% to 7.5% economic growth for 2021 due to positive economic indicators earlier in the year.
Mustapa noted that the Malaysian economy was on a solid recovery trajectory before May 2021, with an improved GDP growth in the first quarter.
"Unfortunately, the increase in Covid-19 cases, and subsequent implementation of lockdown measures, has had an impact on Malaysia’s economic recovery.
"At the moment, our officials are crunching the numbers to assess the impact of the lockdown that began on June 1 on the Malaysian economy," he said.
On recovery efforts, Mustapa said rapid vaccination has been ramped up while the National Recovery Plan provides clear time frames for the gradual opening of the economy.
"Recently, we have done a lot better in ramping up our vaccination rollout.The rate of vaccinations is of course critical in reducing the number of infections and in reviving the economy," he said.
Mustapa also said that the government is in the final stages of fine-tuning the 12th Malaysia Plan.
"The plan will outline a number of fundamental reforms over the next five years to build back Malaysia from the pandemic, and to ensure we are on track in achieving a prosperous, inclusive and sustainable future," he added.
Meanwhile, Mustapa welcomed the recent pledge by the G7 leaders to contribute one-billion doses of Covid-19 vaccine within a year to poorer countries.
He said the move is crucial owing to uneven economic recovery and slower growth in poor nations and emerging economies due to a global resurgence in Covid19 cases.