After officials ordered a fresh lockdown to combat a coronavirus spike caused by the highly contagious Delta type, Malaysia’s central bank reduced its economic growth prediction for this year on Friday.
The country, like the rest of Southeast Asia, is seeing its greatest Covid-19 outbreak yet, with tens of thousands of illnesses and hundreds of deaths per day.
The latest lockdown, which was enforced in June, has forced the closure of most enterprises and caused a major damage to an already shaky economy, but it has so far failed to halt the viral outbreak.
The central bank lowered its full-year growth prediction to 3.0-4.0 percent, down from 6.0-7.5 percent previously, citing the re-imposition of restraints.
Bank Negara, on the other hand, predicted “a modest recovery in the fourth quarter of this year, with better global growth and continued policy support providing a further boost to economic growth.”
The anticipated drop, according to Wellian Wiranto of OCBC Bank in Singapore, raised the possibilities of the central bank decreasing interest rates next month.
The central bank also announced that GDP increased by a better-than-expected 16.1% in the second quarter compared to the same period a year before, when the economy was hit by a pandemic.
GDP, on the other hand, fell from the previous quarter.
Malaysia has reported almost 1.3 million viral cases and nearly 12,000 deaths, despite mostly avoiding the pandemic’s initial wave last year.
However, the country’s vaccination program has accelerated, with roughly 30 percent of Malaysia’s 32 million people now fully immunize.
