Malaysia Economic Monitor, December 2020 : Sowing the Seeds

In 2020, the country experienced its sharpest recession in twenty years due to the impact of a triple shock related to the direct health impact of the pandemic; the economic impact of domestic restrictions on movement; and the impact of a synchronized global recession on Malaysia's tradeable se...

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Main Author:	World Bank
Format:	Report
Published:	World Bank, Washington, DC 2020
Subjects:	ECONOMIC OUTLOOK ECONOMIC RECOVERY CORONAVIRUS ECONOMIC GROWTH COVID-19 PANDEMIC IMPACT PANDEMIC RESPONSE EMPLOYMENT FISCAL TRENDS EXPORTS AGRO-FOOD PROCESSING FOOD SECURITY
Online Access:	http://hdl.handle.net/10986/34929

id	okr-10986-34929
recordtype	oai_dc
spelling	okr-10986-349292021-04-23T14:02:12Z Malaysia Economic Monitor, December 2020 : Sowing the Seeds World Bank ECONOMIC OUTLOOK ECONOMIC RECOVERY CORONAVIRUS ECONOMIC GROWTH COVID-19 PANDEMIC IMPACT PANDEMIC RESPONSE EMPLOYMENT FISCAL TRENDS EXPORTS AGRO-FOOD PROCESSING FOOD SECURITY In 2020, the country experienced its sharpest recession in twenty years due to the impact of a triple shock related to the direct health impact of the pandemic; the economic impact of domestic restrictions on movement; and the impact of a synchronized global recession on Malaysia's tradeable sectors. Malaysia's economy is projected to grow by 6.7 percent in 2021, after contracting by 5.8 percent in 2020. However, the rebound in economic activity is subject to numerous uncertainties such as the deployment of an effective vaccine and the robustness of a rebound in global growth. Notwithstanding a growth rebound in 2021, Malaysia is not expected to recover fully from the shock of COVID-19 within the next few years. The Malaysian government has delivered a series of economic response packages to mitigate the impact of the crisis. Public policies, including cash transfers, wage subsidies and loan moratoria, have helped reduce the impact of the pandemic on vulnerable households and firms. While these measures have been vitally necessary, they have been implemented at a time when the government is experiencing a dramatic decline in revenues, creating a challenge to the medium-term fiscal outlook. Like governments across the world, Malaysia has depleted much of its available fiscal space and will exit the crisis with a larger burden of debt and contingent liabilities. This has resulted in difficult intertemporal constraints for the government to further expand expenditures on relief measures and consumption-supporting stimulus today, which may leave the government less equipped to invest in lasting recovery and growth tomorrow without the support of a stronger revenue base. When the current situation stabilizes and recovery becomes more entrenched, the government should refocus its fiscal policy to rebuild buffers against future shocks and to sustain public financing for inclusive, long-term growth. Addressing the fiscal legacies of the present crisis and the pre-existing structural weaknesses constraining the governments' ability to sustainably finance shared prosperity will require comprehensive medium-term plans to enhance revenue mobilization. 2020-12-16T15:27:54Z 2020-12-16T15:27:54Z 2020-12-16 Report http://hdl.handle.net/10986/34929 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Economic Updates and Modeling East Asia and Pacific Malaysia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	ECONOMIC OUTLOOK ECONOMIC RECOVERY CORONAVIRUS ECONOMIC GROWTH COVID-19 PANDEMIC IMPACT PANDEMIC RESPONSE EMPLOYMENT FISCAL TRENDS EXPORTS AGRO-FOOD PROCESSING FOOD SECURITY
spellingShingle	ECONOMIC OUTLOOK ECONOMIC RECOVERY CORONAVIRUS ECONOMIC GROWTH COVID-19 PANDEMIC IMPACT PANDEMIC RESPONSE EMPLOYMENT FISCAL TRENDS EXPORTS AGRO-FOOD PROCESSING FOOD SECURITY World Bank Malaysia Economic Monitor, December 2020 : Sowing the Seeds
geographic_facet	East Asia and Pacific Malaysia
description	In 2020, the country experienced its sharpest recession in twenty years due to the impact of a triple shock related to the direct health impact of the pandemic; the economic impact of domestic restrictions on movement; and the impact of a synchronized global recession on Malaysia's tradeable sectors. Malaysia's economy is projected to grow by 6.7 percent in 2021, after contracting by 5.8 percent in 2020. However, the rebound in economic activity is subject to numerous uncertainties such as the deployment of an effective vaccine and the robustness of a rebound in global growth. Notwithstanding a growth rebound in 2021, Malaysia is not expected to recover fully from the shock of COVID-19 within the next few years. The Malaysian government has delivered a series of economic response packages to mitigate the impact of the crisis. Public policies, including cash transfers, wage subsidies and loan moratoria, have helped reduce the impact of the pandemic on vulnerable households and firms. While these measures have been vitally necessary, they have been implemented at a time when the government is experiencing a dramatic decline in revenues, creating a challenge to the medium-term fiscal outlook. Like governments across the world, Malaysia has depleted much of its available fiscal space and will exit the crisis with a larger burden of debt and contingent liabilities. This has resulted in difficult intertemporal constraints for the government to further expand expenditures on relief measures and consumption-supporting stimulus today, which may leave the government less equipped to invest in lasting recovery and growth tomorrow without the support of a stronger revenue base. When the current situation stabilizes and recovery becomes more entrenched, the government should refocus its fiscal policy to rebuild buffers against future shocks and to sustain public financing for inclusive, long-term growth. Addressing the fiscal legacies of the present crisis and the pre-existing structural weaknesses constraining the governments' ability to sustainably finance shared prosperity will require comprehensive medium-term plans to enhance revenue mobilization.
format	Report
author	World Bank
author_facet	World Bank
author_sort	World Bank
title	Malaysia Economic Monitor, December 2020 : Sowing the Seeds
title_short	Malaysia Economic Monitor, December 2020 : Sowing the Seeds
title_full	Malaysia Economic Monitor, December 2020 : Sowing the Seeds
title_fullStr	Malaysia Economic Monitor, December 2020 : Sowing the Seeds
title_full_unstemmed	Malaysia Economic Monitor, December 2020 : Sowing the Seeds
title_sort	malaysia economic monitor, december 2020 : sowing the seeds
publisher	World Bank, Washington, DC
publishDate	2020
url	http://hdl.handle.net/10986/34929
_version_	1764481954723397632

Malaysia Economic Monitor, December 2020 : Sowing the Seeds

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