• BNM projects 2021 GDP growth to be between 6.0% and 7.5%
• Growth prospects depend on global recovery
• Growth outlook also underpin by policy supports
• Private consumption to anchor growth in 2021
• Private investment to rebound 5.4% in 2021
• Investment activity to rebound, driven by better demand conditions and Government initiatives
• Exports of goods and services to expand 13.1% on strong external demand
• Current account to remain in surplus
• Headline inflation to average +2.5% - +4.0%; core CPI +0.5% to +1.5%
• Current account surplus to narrow to 2.5% - 3.5% of GDP
• Malaysia economy is expected to recover in the remainder of 2021

Bank Negara Malaysia (BNM) expects the Malaysian economy to grow between 6.0% to 7.5% in 2021, compared to -5.6% in 2020, supported by economic recovery amid post-pandemic rebound.

BNM said that the domestic economy would be underpinned by the recovery in global demand and gradual improvement in domestic economic activity. The improvement in external demand would translate into a rebound in domestic production mainly manufacturing sectors that contribute the biggest portion in exports. The growth also would be support by less stringent containment measures, vaccination, and gradual improvement in labour market conditions.

The comprehensive and complementary policy support will continue to reinforce the economy through both fiscal and monetary stimulus. The accommodative policy support post- pandemic will be the main tools to provide ample liquidity and financial support to the economic agents which eventually improve the broad base income. Apart from that, Bank Negara said the COVID-19 developments remain key in influencing Malaysia’s growth trajectory in 2021, particularly the extent and duration of containment measures and the rollout of vaccines.

Source: BIMB Securities Research - 1 Apr 2021