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PETALING JAYA: Economists have expressed doubts that Malaysia’s gross domestic product will continue to grow in the fourth quarter of the year despite a rebound in the economy in the third quarter recently.
Official statistics showed that GDP recovered from minus 17.1% in the second quarter of 2020 to minus 2.7% in the third quarter.
The second quarter decline was attributed to movement restrictions to contain the spread of Covid-19.
However, economist Carmelo Ferlito, executive director of the Malaysia Market Education Center, said the government should not be too optimistic about the growth rate.
“Year-on-year growth remains on a negative path and the rebound in the third quarter of the second was to be expected because companies were allowed to resume operations,” he told FMT.
He does not believe that Malaysia is still on the road to recovery.
“I think we are still on the physiological rebound. Some of the measures in the 2021 budget may eventually extend this rally, at a cost, of course, but I think they will not be able to set the pace for a recovery, “he said.
He called for reforms of companies linked to the government and greater openness to international trade.
Nazari Ismail from Universiti Malaya said that the GDP rate in the fourth quarter could experience a downward trend due to restrictions in the main states until December 6.
Economic recovery would be slow and uncertain or short-lived due to high indebtedness. “Any future shock to the economy will again threaten the recovery.”
Goh Lim Thye, also from Universiti Malaya, said the impacts of the recently imposed CMCO would be less severe than in the second quarter because most economic sectors were allowed to operate.
However, the momentum of the recovery could be interrupted as the retail, recreation and tourism sector will suffer as the public is encouraged to stay home.
