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apple developer account( Bank revises Malaysia's economic growth forecast to 3.3% in 2021


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,KUALA LUMPUR: The World Bank has revised Malaysia’s economic growth projection to 3.3 per cent in 2021, down from the 4.5 per cent forecast in June.It said the ongoing Movement Control Orders, increased precautionary behaviour and subdued labour market conditions were expected to weigh down further on private consumption and overall economic growth, especially for services-related sectors, which had been heavily impacted by movement restrictions."However, the external sector will continue to provide support to the economy, especially in the exports of electrical and electronic (E&E) goods and medical rubber gloves. Nevertheless, the momentum is expected to moderate given the resurgence of COVID- 19 cases in advanced economies and in China,” it said in a statement today.The World Bank also said the number of Malaysians living below the national poverty line of US$10 per person per day (2011 PPP) was expected to decline gradually, and the poverty rate was expected to return to its pre-pandemic level by 2022.The bank said the pace and trajectory of recovery going forward would depend on several factors, namely the national vaccination programme and the effectiveness of pandemic containment measures.”The positive progress of the vaccination programme should alleviate the strain on healthcare system and would allow for the relaxation of containment measures while it needs to be complemented with robust testing and tracing mechanisms to help minimise the risks of future resurgence,” it said.The World Bank has projected higher economic growth of 5.8 per cent in 2022 and 4.5 per cent in 2023 for Malaysia.Speaking at a virtual press conference on the launch of World Bank’s East Asia and Pacific Economic Update October 2021 report today, World Bank Group lead economist Apurva Sanghi said there had been a silver lining, namely digitalisation that had taken off in a major way, with the external environment having been quite supportive to the export sector.Nevertheless, he said fiscal support was still needed to recover from the current negative output gap and to support the vulnerable groups."So improving the tax collection framework, revisiting the tax expenditure system and exploring other forms of taxation, including improving tax administration, with all mobilised revenues and resources for the span, would be crucial,” he saidHe said Malaysia should focus on revenues and expenditures, and raise resources in an efficient manner.Commenting on the 12th Malaysia Plan, World Bank country manager for Malaysia, Yasuhiko Matsuda, said the plan articulated a long-term vision that was highly appropriate and important, especially given the quality of the plan for which Malaysia was known for.”But at the same time, the circumstances require us to be very adaptable and nimble,” he said.As for the East Asia and Pacific region, the report said recovery had been undermined by the spread of the COVID-19 Delta variant, prolonging the distress for firms and households and likely slowing economic growth and increasing inequality."Economic activity began to slow down in the second quarter of 2021, and growth forecasts have been downgraded for most countries in the region,” it said, adding that the damage done by the resurgence and persistence of COVID-19 was likely to hurt growth and increase inequality over the longer-term.East Asia and Pacific chief economist Aaditya Mattoo said accelerated vaccination and testing to control COVID-19 infections could revive economic activity in struggling countries as early as the first half of 2022, and double their growth rate next year."But in the longer term, only deeper reforms can prevent slower growth and increasing inequality, an impoverishing combination the region has not seen this century,” he opined.The report also estimated that most countries in the region, including Indonesia and the Philippines, could vaccinate more than 60 per cent of their populations by the first half of 2022. This would significantly reduce mortality, allowing a resumption of economic activity.However, it said the region would need to seriously address vaccine hesitancy and limitations in distribution capacity to prevent plateauing coverage; increasing regional production of vaccines to reduce dependence on imported supplies; and strengthening health systems to deal with the prolonged presence of the disease."International assistance is needed to support national efforts in all these areas, especially in countries with limited capacity,” the World Bank said. - Bernama


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