KUALA LUMPUR,Jan 22: Malaysia is maintaining its gross domestic product (GDP) growth target of between 6.5% and 7.5% for 2021 despite the emergency declaration and enforcement of the movement control order (MCO 2.0), finance minister Tengku Zafrul Aziz said.
“It is still early and we are still in the first quarter of the year. So we are maintaining it but our forecast is at risk given with what is happening during the MCO 2.0.
“It (the GDP) will be at the lower end of our forecast,” he said in an interview with Bloomberg today.
Tengku Zafrul said the stability and consistency of policies were crucial in controlling Covid-19 and enabling the economy to recover.
He said the government was committed to supporting businesses and the people, and was ready to deploy more resources to combat the virus if needed.
“The impact (of losses on the economy) per day during the previous MCO was around RM2.4 billion, but this time around, it is about RM700 million per day.
“Additionally, we have started to implement various stimulus packages, and the recently approved Budget 2021 and the new (Permai) assistance package will help to mitigate the impact on the economy,” he said.
Asked whether there would be moves to expand the debt ceiling, Tengku Zafrul said the government had no plan to increase it at the moment as it was too early.
“We will continue to forecast that our debt level will be below the 60% ceiling we set earlier on,” he said.
On the 1MDB scandal, he said Malaysia had recovered about RM15.4 billion in cash and physical assets linked to the sovereign wealth fund.
He said Malaysia was committed to securing the remaining assets, above and beyond what it had achieved today, regardless of the Covid-19 situation.
“The government remains committed to undertaking a responsible and pragmatic approach in the repatriation process that benefits the country and the people,” he said, adding that 1MDB debt servicing was part of the government’s projection under Budget 2021.
Commenting on US President Joe Biden’s presidential inauguration, Tengku Zafrul expressed hope that the trade tensions between the US and China would be diffused under the new administration.
“We hope that global trade can function in a more orderly manner under the ambit of the World Trade Organization,” he said.
The US is Malaysia’s third largest trading partner, accounting for 10% of the total trade in the first three quarters of last year.