KUALA LUMPUR — New official data show Malaysian trade dropping significantly in February, adding weight to a central bank warning of a looming recession brought on by the coronavirus pandemic.
Bank Negara Malaysia, the central bank, said early on Friday that the country’s economy could contract by up to 2 per cent in 2020 due to the outbreak.
According to the Department of Statistics and the Ministry for Trade and Industry, Malaysia’s trade in February was down 12.7 per cent compared to January.
Although trade increased by 11.6 per cent when measured year-on-year, this year’s plunge is likely to continue while the coronavirus pandemic rages.
On February 29, global reported cases of Covid-19, the disease caused by the new coronavirus that originated in China in late 2019, stood at just over 86,000, with 25 cases confirmed in Malaysia.
However the disease has since spread rapidly and was categorized as a pandemic by the World Health Organization (WHO) on March 11.
More than 1 million people have been infected and economies around the world have stalled due to lockdowns and travel bans.
As a consequence, Malaysia’s trade slump will continue, with the central bank estimating that exports – such as palm oil and natural gas – will drop by almost 9 per cent and that other linchpin sectors such as tourism will be hard-hit.
Gross domestic product (GDP) growth for 2020 is “projected to be” between minus 2 per cent and 0.5 per cent, according to the central bank.
The Asian Development Bank (ADB), a Manila-headquartered lender, said on Friday that Malaysia’s growth “will plummet nearly to zero in 2020.”
Citing “unprecedented containment measures” that are “crucial to effectively slow the spread of the virus,” Nor Shamsiah Yunus, Malaysia’s central bank chief, warned the measures are “triggering supply and demand shocks.”
Speaking during an online press conference, she said that Malaysia will be hit hard “by weak global demand, supply chain disruptions and Covid-19 containment measures both abroad and domestic.”
On March 18, the Malaysian government imposed a lockdown aimed at containing the spread of Covid-19, shutting the country’s borders and forcing most businesses to close.
Citizens are under strict orders to stay at home unless commuting to work in “essential” sectors or making shopping trips.
Last week the government announced a 58-billion-dollar fiscal stimulus plan – an outlay equivalent to almost a sixth of GDP.
The splurge, much of it in the form of loans, is aimed at shoring up the economy in the face of a pandemic that has killed more than 53,000 people worldwide, including 50 in Malaysia, according to data collated by Johns Hopkins University in the United States.
Though the stimulus is unlikely to stave off recession, the central bank said on Friday that it “will help to cushion the economic fallout” of the lockdown and stalling of global commerce.Show