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Malaysia sees economic rebound in second half

Malaysia sees economic rebound in second half

Malaysia's central bank governor on Wednesday predicted the economy will start to recover in the second half of this year and said cutting interest rates further would not be constructive in shoring up growth.
Bank Negara Gov. Zeti Akhtar Aziz said exports remained weak, contracting by about 15 percent in both February and March after a 27 percent plunge in January. But this was offset by steady domestic demand, robust tourist arrivals and strong loans growth.
Zeti said second quarter economic data was "very much the same as in the first quarter" but expects growth to rebound in the second half with the government's planned stimulus measures totaling 67 billion ringgit ($19 billion).
"The first half of this year will see a contraction. In the second half we expect the impact of the fiscal stimulus to take effect, therefore it will support an improvement in the domestic economy," she told reporters.
Global appetite for Asian exports have plunged, and the government now expects the economy to shrink 1 percent this year in a worst-case scenario. Most economists however, expect the country to fall into a deeper recession.
Zeti said further cutting interest rates, which are already at historic lows, was "not constructive" to boost growth.
"This rate is the appropriate rate in this point of time," she said, reiterating that Bank Negara's current focus was to improve access to financing _ not lowering cost of financing.
Bank Negara last Friday kept its overnight policy rate _ used by commercial banks to set lending rates _ unchanged at 2 percent after slashing the rate three times since November.


Updated : 2021-05-17 00:46 GMT+08:00