KUALA LUMPUR: Malaysia's improving economic performance will boost investors' confidence and portray a good indicator that the country is going in the right direction, an economist said.
Putra Business School Associate Professor Abu Sofian Yaacob said the strong growth of the Malaysian economy and the increasing gross domestic product (GDP) are positive signs to would-be investors that the country is doing well amid rising cases of COVID-19 infections.
"Although Malaysia is still facing a high COVID-19 infection rate at the moment, we have proven that we managed to increase our GDP, along with the confidence that the vaccination rate is on track towards herd immunity," he told Bernama today.
Earlier, Bank Negara Malaysia (BNM) announced that the Malaysian economy grew by 16.1 per cent in the second quarter (Q2) of 2021, supported mainly by the improvement in domestic demand and continued robust exports performance.
Abu Sofian said that in order for the economy to continue its positive run, the government needs to enforce more stringent measures to ensure that the economic sectors remain in operation with minimum COVID-19 infection risks.
He noted there is also a need to reopen more economic sectors as soon as possible to boost the livelihoods of the people, especially those involved in micro-businesses.
"By allowing those people to reopen their businesses, they will be able to have a more stable income and not entirely dependent on government handouts," he added.
However Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid opined that the economy is still soft and the extension of lockdowns will continue to exert influence over economic activities.
"While the Q2 2021 GDP came in higher, this is merely due to a low base effect. If we compare with the Q2 2019 GDP level, the economy is still contracting by 3.9 per cent," he said.
The central bank today also revised the economic growth target for 2021 to between 3 and 4 per cent, slower than the earlier projection of between 6 and 7 per cent.
Mohd Afzanizam said the GDP forecast revision was warranted in light of the heightened uncertainties on the pace of the reopening of the economy.
"At 3 to 4 per cent forecast range, it clearly shows that the central bank and the government are wary about downside risks.
"That would mean the stand on monetary and fiscal policy are expected to remain expansionary in order to facilitate the recovery process," he said.
Meanwhile, Mohd Afzanizam noted that the prerequisite for a sustainable economic recovery is the speed of the reopening of the economy.
"This will greatly hinge on the vaccination programme which has been proceeding well.
"While the balance of risks is tilted on the downside, the sizable policy support should provide the needed boost once the country has reached herd immunity in the near future," he said.
-- BERNAMA
Bernama
Fri Aug 13 2021
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid opined that the economy is still soft and the extension of lockdowns will continue to exert influence over economic activities. - Sinar Harian photo
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.