Malaysia's economy is expected to show better prospects in the next few months based on the Leading Index performance which recorded 108.8 points in December 2020 compared with 101.6 points in the same month in 2019, as well as maintaining the annual growth of 7.1% since November 2020.
The Department of Statistics Malaysia (DoSM) chief statistician Datuk Seri Dr Mohd Uzir Mahidin said as countries globally including Malaysia are in the process of launching the Covid-19 vaccine programmes, Malaysia together with the global economies were projected to return to positive growth this year.
"The global economy currently is in the recovery trend from the devastating effects of Covid-19. According to the World Economic Outlook Update issued by the International Monetary Fund (IMF) in January 2021, the global economies are projected to perform better at 5.5% in 2021 and 4.2% in 2022 following slowing economic activities due to measures put in place to contain the pandemic in 2020," he said.
He said this in a statement on Malaysia Economic Statistics Economic Review Volume 2/2021 issued by DoSM today.
On the country's economic performance in the fourth quarter of 2020, Mohd Uzir said the Covid-19 pandemic had caused a significant adverse impact on the global economy last year whereby almost all countries worldwide experienced economic slowdown, and Malaysia was not spared as its gross domestic product (GDP) contracted by 3.4%.
On a monthly basis, Malaysia's economy declined 4.7% in October, -4.0% in November, and -1.7% in December.
"Overall for 2020, Malaysia's GDP contracted 5.6% compared with a growth of 4.3% in 2019, following the deterioration in all economic sectors because of several waves of Covid-19 infections, as well as the enforcement of various movement control order throughout the year.
"This contraction is the second worst it recorded since the economic crisis in 1998," he said.
Even though the health crisis still persists in 2021, the government's response this time was more balanced between livelihoods and allowing economic sectors to operate under strict standard operating procedures which were positive measures to the overall economy and provided respite to businesses.
Commenting on the arrival of the first shipment of Covid-19 vaccine in Malaysia, Mohd Uzir said it definitely would assist in reducing the impact of the pandemic on the economy, enabling more economic sectors to reopen and possibly allow the reopening of international borders in stages.
"Nevertheless, businesses should not consider the vaccine as the solution and need to continue practising the new normal. With the acceleration of e-commerce adoption due to physical distancing and movement restrictions, digitisalisation is undoubtedly the way forward," he said.
Hence, he said the comprehensive Malaysia Digital Economy Blueprint launched recently was timely as it outlines the focus on digitalisation including talent empowerment, providing a trusted and secure digital environment, and expand the focus sectors in the economy.