Tengku Zafrul maintains Malaysia’s GDP projection


MALAYSIA’S GDP is expected to grow as projected — between 6.5% and 7.5% in 2021, despite losing RM600 million daily due to the second Movement Control Order (MCO 2.0).

Finance Minister Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz (picture) said the country is expected to ride on higher oil prices and robust recovery in the global export market.

He said when the government tabled the country’s RM322.5 billion Budget 2021, it was assumed that the oil price would remain around US$42 (RM169.90) per barrel.

However, he said the current oil price has surged between US$50 and US$55 per barrel, which will translate to more revenue for the nation’s coffer.

“Another thing which is different is the projection in the export, which is showing a robust expansion of global trade compared to the previous year,” Tengku Zafrul said during the virtual Bursa Malaysia Forum yesterday.

At the same time, Tengku Zafrul also noted that the MCO 2.0 is not similar to the previous MCO in March 2020 where stricter lockdowns resulted in RM2.4 billion loss per day.

The government’s decision to allow essential sectors like commodities and mining to operate at near full capacity has contributed significant numbers to the GDP.

“However, it is still early days in 2021 and (for us to see the impact of) the implementation of Budget 2021, as the measures have just begun.

“We still have time to revise it when it’s necessary,” said Tengku Zafrul, who did not dismiss that the GDP will be revised should the MCO 2.0 be prolonged.

Yesterday, Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob announced the extension of MCO 2.0 in all states except Sarawak until Feb 18.

Ismail Sabri said the extension was made following an upward trend in daily cases in all the states, with a positivity rate in clusters at between 20% and 40%.

Meanwhile, Tengku Zafrul said the government has started working on Budget 2022 to address the country’s structural issues, while rolling out Budget 2021 to ensure the country’s future measures will be more strategic, targeted and outcome-based.

Referring to Budget 2022 and the 12th Malaysia Plan (12MP), he said there are structural issues that require deeper consideration and longer-term planning.

The upcoming 12MP for 2021-2025 and Budget 2022 will address issues including human capital policies and the United Nation’s Sustainable Development Goals.

Among others, Tengku Zafrul said the Finance Ministry (MoF) will regulate the shadow economy to strengthen the country’s revenue base.

The shadow economy was estimated to be 18% of GDP, or about RM300 billion in 2019.

“Regulating the shadow economy will ensure that informal sector workers are protected.

“Additionally, we are executing our Medium-Term Revenue Strategy, which among others, will diversify our economy, enhance our tax framework to reduce leakages and reduce our dependence on commodities,” he said.

Read our earlier report

MCO 2.0 to cost Malaysia RM600m daily, says Tengku Zafrul