PETALING JAYA,Nov 16: Economists have voiced 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 the GDP rebounded 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, chief executive of the Centre for Market Education Malaysia, said the government should not be too optimistic about the growth rate.
“The year-on-year growth is still on a negative path and the Q3 rebound from Q2 was to be expected because businesses were allowed to resume operations,” he told FMT.
He did not believe that Malaysia is on the path to recovery yet.
“I think we are still in the physiological rebound. Some of the measures in the 2021 budget can eventually extend this rebound – at a certain 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 government-linked companies and more openness to international trade.
Nazari Ismail of Universiti Malaya said the GDP rate in the fourth quarter might experience a downward trend because of restrictions in major states until Dec 6.
Economic recovery would be slow and uncertain or short-lived because of high indebtedness. “Any future shocks in the economy will threaten the recovery again.”
Goh Lim Thye, also of 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 recovery could be disrupted as the retail, recreation and tourism sector will be affected because the public are encouraged to stay home.