KUALA LUMPUR, 12 February 2020 – Bank Negara Malaysia (BNM) Governor Datuk Nor Shamsiah Mohd Yunus said the Covid-19 outbreak will affect Malaysia’s economic growth, particularly in the first quarter of 2020 (1Q20).
Nor Shamsiah said it is “too hard to predict” the impact of this virus outbreak on the country’s economic growth moving forward.
However, she noted that the gross domestic product (GDP) growth, “particularly in the first quarter” of this year, will be affected by the Covid-19.
“The overall impact of the virus on the Malaysian economy will depend on the duration and spread of the outbreak as well as policy responses by authorities.”
Datuk Nor Shamsiah Mohd Yunus, BNM Governor
Nor Shamsiah noted that looking forward, the central bank will be revealing its forecasts for 2020 GDP growth on March 25, in conjunction with the release of BNM’s Annual Report.
In contrast, during the Severe Acute Respiratory Syndrome (SARS) outbreak, Malaysia had recorded a 5.9% GDP growth in 2003, and the nation recorded a 5.1% growth in 2015 during the Middle East Respiratory Syndrome (MERS) epidemic.
BNM also said that the ringgit’s performance in 2020 will continue to be influenced by external developments including the US-China trade deal and the Covid-19 outbreak.
In a statement today, BNM said that while the phase one trade deal between the US and China contributed to an improved outlook on global trade, investor sentiments are also affected by concerns over the recent coronavirus outbreak.
“As a result, the ringgit depreciated by 1.3% against the US dollar this year up to Feb 10, amid weaker sentiments in global financial markets.”
At 12:05pm today, the ringgit weakened to 4.1365 against the US dollar. The exchange rate so far today was between 4.1285 and 4.1365.
For 2019, the central bank said the ringgit appreciated 2.3% against the US dollar in the fourth quarter, supported mainly by the resumption in non-resident portfolio inflows.
BNM said this was due to improved investor sentiments following positive developments on global trade negotiations.
On Monday, Prime Minister Tun Dr Mahathir Mohamad said Malaysia’s economy is expected to expand by 4.8% this year, maintaining the government’s forecast as it braces for a potential global slowdown tied to the Covid-19 outbreak.
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