KUALA LUMPUR: Moody's Investors Service expects Malaysia's growth prospects to remain strong.
This is underpinned by the country's well-developed infrastructure, competitive services and manufacturing sectors, as well as ample natural resources.
The resiliency of its growth was also supported by a highly diversified economy, Moody's said in a report today.
The firm expects Malaysia's real gross domestic product (GDP) growth to rebound to 5.0-5.5 per cent this year.
This will be driven by base effects and the government's stimulus packages, although movement and activity restrictions because of still high daily coronavirus infections – albeit less stringent compared to the second quarter of last year – will weigh on the recovery.
"The pace of economic recovery will also depend on the rate of immunisation roll-outs and vaccine efficacy both domestically and globally," it said.
In 2020, Malaysia's real GDP contracted by 5.6 per cent as a result of the Covid-19 pandemic.
The coronavirus-induced domestic movement controls resulted in a sharp decline in domestic consumption and investment, while lock-downs and social restrictions at its key trading partners hurt its net exports, Moody's said.