KUALA LUMPUR: The lower economic impact of the restrictive measures is in line with analysts expectations, with most of them revising their gross domestic product (GDP) projection for Malaysia for 2021 upwards.
Standard Chartered (StandChart) said given still-strong external demand and the diminishing effect of mobility measures, it has upgraded its 2021 GDP growth forecast to 6.3 per cent from 5.7 per cent.
"Robust external demand, improved ability to work remotely, ongoing policy stimulus, global vaccination rollout and more targeted containment measures limit the downside impact of mobility restrictions on growth.
"In particular, strong external demand in electronics and rubber gloves manufacturing have helped mitigate weakness in sectors such as food and beverages, transport and accommodation services," it said in a note today.
StandChart said looking forward, it expects ongoing policy stimulus - including large-scale infrastructure projects - global vaccination rollout and strong demand for Malaysia's exports of electronics rubber gloves and commodities to support the economic revcovery.
However, it said the pandemic remains a downside risk.
"The government has reimposed MCO 3.0 from May 12 to June 7, which may affect consumer-facing sectors in the second quarter; the negative economic impact should be manageable," it said.
Meanwhile, JPMorgan Chase Bank said despite the imposition of MCO2.0 at the start of the year, the impact on economic activity remained relatively muted as MCO2.0 permitted the resumption of economic activity across most sectors.
It said measures under the latest nationwide MCO3.0, in its view, serve to limit social interactions ahead of the month-long Eid festival which begins this Thursday.
"Thus, we continue to expect a smooth road to economic recovery for the remaining course of the year, led by the tradable sector, though we remain cognisant that the latest rise in Covid-19 cases and slow pace of inoculation may have knock-on implications for domestic activity," it said.
JPMorgan said it continued to expect 2021 GDP growth to remain at 6.8 per cent year-on-year, amid continued accommodative and targeted policy support, well within the central bank's GDP forecast range of 6.0-7.5 per cent.