KUALA LUMPUR, Feb 19 – Investment firm Capital Dynamics Sdn Bhd expects Malaysia’s gross domestic product (GDP) to grow at between 3.5 per cent and 4.0 per cent this year, given various external challenges.
Managing director Tan Teng Boo said the Malaysian economy is struggling this year because of various external factors that come in at the same time.
“There is not one single cause for the decline in the FTSE Bursa Malaysia KLCI or our GDP. It is because of the US-China trade war, Brexit, Hong Kong riots, Australian bushfires, South Korea-Japan quarrel and the Covid-19 outbreak.
“With all these factors, our first-quarter GDP performance will not be that pretty,” he told a media briefing on the company’s upcoming Special Talk, titled “Latest Investment Outlook”, to be held on March 7.
However, he said the Covid-19 outbreak would likely peak soon, either by this month or next month, considering that the recovery rate has also been gaining momentum, at 14,689 recovered cases globally as of today.
Tan said once the outbreak has peaked, China would be able to stabilise from the epidemic and then the economic situation could improve.
“China has been the biggest source of economic growth for the global economy for the last 15-20 years. If China’s economy recovers faster, that will likely provide a boost to Malaysia’s GDP,” he said.
On the local front, he said more needed to be done to draw greater confidence among foreign investors such as providing clarity on the country’s political future and long-term economic policies.
Tan said these two issues were the main stumbling block for more foreign direct investments to come into Malaysia instead of neighbouring countries such as Vietnam, Singapore and Indonesia.
“Amidst extreme caution clouding the global economy, Malaysia is not presenting a strong case for foreign investors to be here,” he added.
In conjunction with the event today, Capital Dynamics is also launching an initiative called “Aid Xinyang” to assist the city in coping with the Covid-19 outbreak, considering that most resources were only devoted to helping Wuhan in Hubei province, the epicentre of the outbreak.
Xinyang, with a population of seven million people, has only nine operative hospitals that are able to treat Covid-19 patients.
Tan said the objective of this initiative is to provide the city populace with medical supplies, such as N95 masks, protective suits and goggles, while monetary donations would be utilised to help purchase the necessary medical supplies, or would be channeled to two organisations in Xinyang city, namely the Xinyang City Red Cross Organisation and Xinyang City Central Charity Organisation.