KUALA LUMPUR, Nov 13 ― MIDF Research is maintaining its forecast for Malaysia’s Gross Domestic Product (GDP) growth at -4.8 per cent in 2020.

The research house said while the country recorded a slower-than-expected decline in third-quarter (Q3) GDP at -2.7 per cent year-on-year (y-o-y) against -17.1 per cent y-o-y in the second quarter, the Q3 performance is still close to its expectation of -3.2 per cent.

"Based on the current developments and indicators, the economy is set to continue improving. However, we expect it to be on a gradual term as the sentiments are still weak due to the resurgence of Covid-19 cases in the country and also globally, with other downside risks emerging such as the political situation, rising protectionism and geopolitical tensions,” it said in a research note.

MIDF said the current conditional movement control order (CMCO), though less stringent than previous measures as most of the economic activities are allowed to continue operating according to the standard operating procedures, will still have some impact on the demand due to physical movement restrictions.

"We recognise that the major impact of the CMCO on the economy is mainly from weaker consumer spending and its spillover effect to the services industry, particularly consumer-related sub-sectors such as retail trade, restaurants, hotels, travel, education and recreation services.

"While international borders remain closed, the support coming from domestic tourism activities will be curtailed to some extent following the CMCO,” it added.

Nevertheless, MIDF believes that the risk to consumption will be somehow cushioned by growing online purchases facilitated by availability of e-commerce platforms, home delivery services and online financial services such as e-wallet and online banking.

In addition, it said, stimulus packages announced on top of the cumulative 125-basis point cut in Overnight Policy Rate will continue to provide support to the recovery. ― Bernama