KUALA LUMPUR, May 13 2020: Bank Negara Malaysia (BNM) is expecting the country’s economic activity to gradually improve in the second half of the year (2H 2020) after Covid-19 containment measures have been further eased.
BNM governor Datuk Nor Shamsiah Mohd Yunus said the gradual resumption of economic activities will also results in a greater demand in the services sector.
“In 2H 2020, the stimulus measures would provide a lift to the growth of consumption and we are going to see improvement in global growth, as more and more countries will reopen their economies
“We will see global trade to continually improve and the technology cycle is now on the upside, so these are some of the factors that would drive growth in 2H 2020,” she told a virtual press conference in conjunction with the announcement of the country’s first-quarter 2020 gross domestic product (GDP), today.
Nor Shamsiah said growth should also accelerate next year as the country’s trading partners have also resumed their economic activities.
She said the pandemic had accelerated the needs of technology due to the needs of social distancing and expects electrical and electronics (E&E), as well as healthcare sectors, to play critical roles in terms of structural reforms to reduce vulnerabilities in the country.
She said the country should also be making gains in the healthcare industry as the country industry players are major producers of medical consumables and manufacturers of high-tech medical devices.
Nor Shamsiah said the country’s economy expanded moderately at 0.7 per cent in the first quarter of 2020, the slowest pace since the third quarter of 2009 due to the Covid-19 restrictions.
She anticipates a deep contraction in Q2 2020 against 0.7 per cent growth in Q1 2020.
“What we are certain is that the Q2 2020 would experience quite a deep contraction before bottoming out, and picking up again as we enter Q3, 2020,” she said.