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Malaysia’s GDP likely contracted in Q3 on renewed COVID-19 curbs: Poll
BENGALURU: Malaysia’s battered economy likely slipped back into contraction in the third quarter as coronavirus-induced restrictions brought economic activity to a near-standstill, a Reuters poll found.
After bouncing back from its worst recession in more than two decades in the second quarter, the Southeast Asian economy shrank 1.3 per cent in July-September from a year earlier, according to the median forecast of 20 economists in the poll.
Forecasts for the change in gross domestic product (GDP), due to be released on Nov 12, ranged from -6.0 per cent to +1.0 per cent, underscoring widespread uncertainty around the economic impact of the COVID-19 pandemic.
“The deceleration reflected strict movement restrictions to curb the more contagious Delta variant virus infections,” said Chua Han Teng, an economist at DBS Group Research.
“With much of the economy under harsh curbs, private consumption, investment, and manufacturing activities took a big hit.”
Renewed COVID-19 lockdowns in the Southeast Asian country dampened a nascent economic recovery, pushing Malaysia’s central bank to slash its 2021 growth forecast to between 3.0 per cent and 4.0 per cent from 6.0 per cent to 7.5 per cent previously.
After chopping its benchmark rate by 125 basis points last year as the pandemic took hold the central bank was expected to keep rates unchanged until the third quarter of next year, a separate Reuters poll showed.
But the economy is expected to gain momentum, expanding 4.0 per cent in the current three-month period as a ramped-up vaccination drive, a record government budget to spur post-pandemic recovery and gradual reopening have boosted hopes of a turnaround.
The government expects Malaysia’s economy to grow between 5.5 per cent and 6.5 per cent next year, driven by normalisation of economic activity, resumption of projects, higher commodity prices and strong external demand.
Source: https://www.channelnewsasia.com/business/malaysias-gdp-likely-contracted-q3-renewed-covid-19-curbs-poll-2302566