Malaysia's economy to bounce back to 9pc in 2021, says IMF.

The International Monetary Fund (IMF) expects Malaysia's economy to bounce back to grow a whopping nine percent next year, from an expected 1.7 percent contraction in 2020.

This will be the fastest among Asean-5 economies, which according to the IMF is likely to expand at an average 7.8 percent next year.

Asean-5 also comprises Indonesia, Thailand, the Philippines and Vietnam, whose gross domestic product (GDP) are projected to grow 8.2 percent, 6.1 percent, 7.6 percent and 7 percent respectively.

Malaysia's solid projection will also set to outpace the global GDP growth, which the IMF expects to recover 5.8 percent next year, sharply higher than the contraction of 3.0 percent for 2020.

"Domestically, in 2021, we are cautiously optimistic that consumer confidence and sentiment will turn positive and Malaysian households will remain financially sound, supported by improving employment conditions and stable incomes, as global and domestic economies recover next year," the IMF said.

"We believe Malaysia's economic fundamentals will remain sound going forward, supported by the government's fiscal discipline and fiscal consolidation, a sustainable (though narrowing) current account surplus, healthy foreign-exchange reserves as well as manageable inflationary pressure," it added.

The Washington-based fund, in its statement late Tuesday, cautioned of "extreme uncertainty around its global growth forecast.

This was due to the pathway of the Covid-19 pandemic including intensity and efficacy of containment efforts, extent of supply disruptions and repercussions of the dramatic tightening in the global financial market.

Analysts expects the IMF to make further downward revisions to global GDP forecasts this year and 2021.

Affin Hwang Investment Bank Bhd believes that no emerging markets, including Malaysia, can escape the downside risks of global recession this year, as advanced economies fall into recession.

Affin Hwang believes sovereign rating agencies...