According to her, the continuation of projects such as Mass Rapid Transit 2, Light Rail Transit 3 and Pan Borneo Highway would lift this year’s gross domestic product growth by one percentage point (+1.0 ppt).
“As the COVID-19 continue to evolve, the restriction will continue in several countries including advanced economies and operation shut down will continue to dampen external demand for export. But in the second half, it is expected to recover.
“The substantial fiscal and OPR will contribute to growth,” she told reporters in Bank Negara’s first virtual press conference that was carried live by Bernama TV today.
Nor Shamsiah noted that growth would likely to go down to between -2 to 0.5 per cent for 2020, due to the ongoing COVID-19 which had claimed the lives of over 51,000 people throughout the world while about 208,000 patients recovered.
The pandemic had caused weak global demand, supply chain disruptions and travel restrictions among others.
The central bank governor said economic growth would continue to be challenging throughout the world this year with the International Monetary Fund predicted the world economy to contract at the rate worst than the 2009 global financial crisis.
Also during the BNM annual report briefing, economic and monetary review and financial stability review, she said the central bank expects continued supply disruption with respect to the oil palm production as well as in the oil and gas sector.
In the first half of 2020, the economy would be rather weak but thanks to the government’s stimulus package coupled with the ongoing infrastructure projects, the BNM is optimistic of some improvement towards the later part of the year.
“The bank expects the economy to rebound in 2021 in line with the projected global recovery. There is great uncertainty in the outlook, the situation is still evolving and the bank will continue to monitor and assess the development of the pandemic and its impact,” she added.
On the labour market outlook, Nor Shamsiah said the COVID-19 scenario would likely result in weaker labour market conditions with the unemployment rate to go up from 3.3 per cent in 2019.
However, the introduction of stimulus measures by the government has partially offset the negative impacts of the virus by safeguarding jobs, mitigating income losses and easing cash flow of firms.
Echoing this, deputy governor Shaik Abdul Rasheed Abdul Ghaffour said the labour market is expected to be considerably weaker and the central bank expects the unemployment rate to increase to about four per cent.
“In comparison, during the world financial crisis, our unemployment rate was at 3.7 per cent while during the Asian financial crisis in 1998 our unemployment rate was at 3.2 per cent. The stimulus package is intended to assist the worker, the household and the businesses, to go through this difficult period,” he said.