Malaysia to lower 2021 GDP growth outlook, likely to about 4%

KUALA LUMPUR (July 12): Malaysia will lower its economic growth outlook for this year, amid movement restrictions to curb the spread of Covid-19, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz (pictured).

Although there are some positive news that the current surge could be contained and the economy will be soon reopened, the government has lowered the projection rate of the country's gross domestic product growth outlook for 2021, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said during an interview with Bloomberg TV.

“We’re in the midst of revising to a lower number and will share the exact number after we get data from the ground,” Tengku Zafrul said today in an interview with Bloomberg TV.

Commenting on whether the forecast could be lowered to around 4%, Tengku Zafrul responded that it could be “around the range you mentioned.” The government has already mentioned that it will revise the outlook, currently at 6%-7.5% in August.

Tengku Zafrul was appointed last week as coordinating minister for Malaysia’s National Recovery Plan, responsible for monitoring the implementation of strategy, including intervention measures.

The government is under pressure as lockdowns are costing the economy about RM1 billion a day with only 10% of the population fully vaccinated. On Saturday (July 10), daily Covid-19 cases hit an all-time high of 9,353 with the Klang Valley making up a bulk of the cases.

Meanwhile, the finance minister also touched on other key points during the interview such as the debt ceiling may have to be increased to 65% (from 60% currently) as the government increases borrowing to fund economic aid packages; while 2021's fiscal deficit will likely widen to 6.5-7.5% (from a projected 6%).

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