Fitch Ratings is a top 3 international rating agency. So, I think its assessment carries some weight, right? So, when it says something good about GDP growth Malaysia, we should read carefully and just accept lah. If you do not know, Malaysia’s sovereign rating is still within the investment grade category yeah. We receive the same rating from all three international rating agencies which includes Fitch Ratings, Standard & Poors as well as Moody’s. So, let’s read what Fitch Ratings said about us.
Article in nst.com.my Fitch Ratings has projected a 5.8% GDP growth for the Malaysian economy in 2021. Recently, Malaysia launched a RM260 billion economic stimulus to combat COVID-19. This stimulus is expected to add 2.9% to the 2020 GDP growth. Finance Minister Tengku Zafrul said that Malaysia has a healthy financial system, strong domestic institutional investors, adequate buffers and robust policy frameworks developed over the years.
He said Malaysia’s fiscal consolidation will also be continued after having the deficit declining from 6.7% in 2009 to 3.4% in 2019. He said, “Malaysia continues to maintain a healthy external position with substantial external assets by banks and corporations, a current account surplus and adequate level of international reserves. Malaysia’s foreign currency external assets continue to exceed its foreign currency external liabilities.” Please do refer to the full article here: Article in nst.com.my
You want to know what’s the projection for 2020? BNM has announced that if COVID-19 does not get worse here in Malaysia, then there’s a chance that we may hit a positive 0.5% GDP growth for 2020. There’s also a chance that the restarting after MCO may not be smooth enough and this may mean that the growth would be negative 2 percent for 2020. We need to understand that all these predictions would also depend on the world as well.
As a trading nation, if the whole world is still shrouded in COVID-19 pandemic, then our recovery will be slower. I think the RM260 billion stimulus is enough for now but we need more communication on the implementation. How soon could the SMEs get the funds they need? How could they get it if their application has been approved. This lifeline that we are throwing to them (SMEs and employees) would need to reach them sooner and not later. happy understanding.
Next suggested article: Our Important SMEs. How we are going to support them