PETALING JAYA，Dec 3: An economist is confident that Malaysia will be able to achieve its 6.5% to 7.5% gross domestic product (GDP) growth target in 2021 despite the Covid-19 pandemic and the global economic downturn.
“Many asked if the country’s GDP projection for 2021, which is around 6.5% to 7.5%, can be achieved. In a simple answer, yes,” Mohd Afzanizam Abdul Rashid, chief economist of Bank Islam Malaysia, said in a tweet today.
Afzanizam said the projection could be achieved due to the large allocation of the 2021 budget, stating that the positive impact of a fiscal policy is faster than a monetary policy.
He said the discovery of a Covid-19 vaccine also boosted the momentum for global economic activities.
“The ringgit against the US dollar is at RM4.075 today from RM4.447 on March 23. FBM KLCI is currently at 1,615.96 points from 1,219.72 points on March 19. Clearly, the financial markets are giving a positive signal,” he said.
He said several industries expect a positive business outlook.
“World Semiconductor Trade Statistics has revised its semiconductor sales forecast for 2021 from 6.2% to 8.4%.
“The oil and gas industry also seems to have a positive outlook. The International Energy Agency expects the world oil demand to increase by 5.8 million barrels per day (mbpd) by 2021 after declining by 8.8 (mbpd) this year,” he said.
Afzanizam said following the increase in development expenditure to RM69 billion in 2021, the construction industry is expected to register a growth of 13.9% compared with a contraction of 18.7% this year.
For the banking sector, he said, the overnight policy rate would be maintained at 1.75%. “This should help the net income margin for the banking industry.”