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5.8% is not high enough. Now there’s a 9% prediction for GDP Malaysia

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GDP is defined as “the total value of goods produced and services provided in a country during one year.” Very briefly, a growing economy means more jobs, higher earnings for businesses and a generally more positive sentiment. With a more positive sentiment, people buy more, businesses also expand and this helps the economy to grow even more. For 2020, the GDP forecast for Malaysia by our Bank Negara Malaysia (BNM) is between 0.5% to negative 2% for 2020?

A few people questioned the forecast of 5.8% for Malaysia for 2021 the other day after I have published this article: GDP Malaysia 5.8%. Question is which year? Well, it’s just a forecast. With forecast, no one knows for sure until after it has happened but all these forecasts would have their own supporting calculations and estimations too. Perhaps this latest one will raise even more eye brows.

This is a forecast by the International Monetary Fund (IMF) and they say that Malaysia’s GDP for 2021 will grow at 9 percent and this will be the fastest among ASEAN-5 countries which are expected to have a combined GDP growth pf 7.8 percent. These ASEAN-5 countries include Indonesia, Thailand, the Philippines and Vietnam. It’s not all good news lah. IMF says Malaysia’s GDP will contract by 1.7% for 2020. This is almost the same as the lower end forecast of Malaysia’s Bank Negara Malaysia (BNM).

Article in nst.com.my The International Monetary Fund (IMF) has projected a GDP growth which is even more higher than Fitch Ratings’ 5.8%. It says the Malaysian GDP growth would hit 9% versus Indonesia (8.2%), Thailand (6.1%), the Philippines (7.6%) and Vietnam (7%). Global growth wise, for 2021 it will be 5.8% versus a projected -3% for 2020. This is caused by COVID-19 lockdowns.

It said, “The advanced economy group is forecast to grow at 4.5 per cent, while growth for the emerging market and developing economy group is forecast at 6.6 per cent.” There’s a catch. This 2021 rebound is dependent on COVID-19 pandemic under control by second half of 2020. Once this happens, then the lockdowns may be relaxed and consumer and investor confidence could be restored. It also assumes that governments were able to prevent widespread firm bankruptcies, extended job losses, and system-wide financial strains. The article is a comprehensive one with more details. Read here: Article in nst.com.my

Don’t worry too much whether the forecasts are up by how much or down by how much. What’s certain is this. The predictions for 2021 are generally positive for Malaysia, ASEAN countries and the world. Think ahead but make your actions now. This is why they say the door for opportunities are not open all the time. If we accept the forecast for 2021, then the action is 2020. It’s definitely not in 2021 when prices would have already moved up again.

Have you researched the stocks you want to buy already? Were they losing business or did the price went down because of sentiment? Have you started looking out for those areas which you love? Have you identified the actual few names that you will now keep monitoring the property prices being listed online? Without these actions, we will do nothing. Please do not just listen to free concerts online yeah. Listen to it but at the same time, do something productive for our financial future too.

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Next suggested article: What happens in that largest country may also happen here

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