Malaysia's economy grew by 4.3 per cent in 2019, the lowest in 10 years. This indicates that the economy is full of challenges ahead. The spread of the novel coronavirus outbreak has impacted the global economy which leads to Malaysia economy facing the risk of getting worse. The first quarter of 2020 faces the greatest impact. The negative alert deserves attention. Malaysians are looking forward to the government and central bank introducing effective plans to stimulate the economy.
The fourth quarter of 2019 gross domestic product growth slowed from 4.4 per cent to 3.6 per cent, far lower than the market expectation. It has also pulled down the annual growth. The official forecast of GDP for 2019 was 4.7 per cent. The poor performance in the last quarter of 2019 was mainly due to volatility in global trade and the disruption in the supply of raw materials. Malaysia’s economy is facing stringent challenge in 2020 due to the novel coronavirus outbreak.
Despite experts predicting that the outbreak may end in April, the World Health Organisation has pointed out that it would be too early to talk about the end of it. In other words, the epidemic is still full of uncertainties. We should be getting ready to face the uncertainties.
Apart from the coronavirus outbreak, Malaysia also needs to pay attention to the impact of post US-China trade war. The US and China have signed the phase 1 trade agreement last month which help to ease tension. But this is only temporary to end the trade war. Once the battle is re-ignited the global economy comes under fire again. Malaysia is not spared under the globalised scheme.
To revive the economy, the central bank, known as Bank Negara, has adopted pre-emptive move on January 22 by lowering the overnight policy rate from three per cent to 2.75 per cent to face the risks of economy turning worse. Bank Negara governor Nor Shamsiah Mohd Yunus said the central bank still has room to revise overnight policy rate. Economists predict that the central bank may announce further cut in the OPR in March to help stimulate the economy. But this will require other plans to go with the revision of OPR to achieve better result.
The government should implement economic stimulus package as soon as possible. It is learned that the government is scheduled to launch the package latest by March. All sectors are looking forward to the stimulus package to spur spending and stimulate the market in a bid to ease the risk of economic downturn.
SIN CHEW DAILY (MALAYSIA)/ASIA NEWS NETWORK