The national restriction movement will impact the economy

By TIN Media | Tourism Malaysia Published 4 years ago on 18 March 2020
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KUALA LUMPUR :

The national restriction as an initiative to limit the COVID-19 outbreak would have a negative effect on the economy in the short term.

As important public and business services are running as normal and the restriction will last for two weeks, the Research Chamber said that the maximum effect will depend on the pace at which the virus spreads and the time it takes to combat this epidemic if the Movement Control Order is extended.

"While the downside risk has risen a little, in our latest gross domestic product (GDP) forecast we have taken into account the possible economic consequences.

" It is projected to decline by 2.3 percent in the first half of this year (1H20). This is mainly due to an expectation of slower growth in the services sector since the virus will impact the transportation, tourism industry and development most," the research note today said.

In the same sense, Kenanga Research has noted a downturn in the manufacturing sector because of supply disruptions resulting from the closure of factories and a poor external demand from the leading trading partners.

"We expect private consumption in 1H200 on a demand-side to decrease further to 5.7%, adding that, as a result, the overall GDP growth is expected to slow this year to 3.1% compared to 4.3% in 2019.

 


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