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Malaysian economy to recover only in 2021. Bad news?

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By the way, if you still do not know, the latest forecasts about Malaysia’s economy are all in the negative territory. Ambank Research says negative 1.1% for 2020. This was Ambank Research’s comment, ““The pandemic virus impact, added with the collapse in oil prices, just aggravated some of the already weak sectors while dampening new areas of economic activities such as services.”

Our Finance Minister said that the economic growth could be weaker than the earlier forecasted of up to negative 2% for 2020. Read it here. Tengku Zafrul said, “But that forecast was made after just two weeks of movement curbs. We’re now more than five weeks in … so our GDP could shrink even more.” CGS-CIMB said that for 2020, it is likely to be negative 4.3%. Click here to read more. So, conclusion for 2020 GDP growth for Malaysia is a simple one. It will be a negative number, just that no one has the same opinion on the actual number yet.

Article in businesstimes.com.sg According to a report from Morgan Stanley, export-oriented economies in South-east Asia could only start recovering by first quarter of 2021. The reasons also include lockdowns which has hit both the exports as well as domestic demand. The Philippines and Indonesia would recover faster because they have a lower exposure to recession impact and relatively higher structural growth.

Morgan Stanley also predicted that China is most likely to return to pre-Covid-19 levels by Q3 2020. All these predictions are based on three factors: how exposed each economy is to the global recession, the institutional response to handle the Covid-19 situation and the ramifications on domestic demand, and the room and willingness to undertake policy easing. There is no V-shaped recovery predicted and it’s more likely to be a gradual one. Please do read the full article here: Article in businesstimes.com.sg

Let’s hope their prediction for China comes true yeah. Q3 2020 starts from July and that’s just around the corner. China is our largest trading partner, so that’s good news for us too. As for the prediction of recovery only in Q1 2021, let’s look at it positively. They could see the economy recovering. In other words, if we are thinking of grabbing some potential opportunities, it does seem that the window is not as wide as what some of us thought.

There were also a few friends who said that they will wait until October 2020 for that potential ‘red sea’ of opportunities. If we assume they are right, then they have just 2 months to invest into everything they think is worthwhile. Anyway, forecasts are just forecasts yeah. Statistically speaking, the only way we would be accurate is to look at history. Other than that, everything else would just be potential happenings. Waiting is great. Just remember to be on the lookout. This is not a good time to miss opportunities that float along… Happy investing.

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Next suggested article: More Japanese manufacturing coming to ASEAN. Good news

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