Expert: Nation will weather crisis

recession. We have to be realistic and accept this possibility,” he told theSun yesterday.

However, the senior economist was optimistic that the country would be able to pull through such trying times, citing several past economic crises.

“We have survived crisis in the past, we will do it again, but it will be an enormous struggle,” he said.

Malaysia last faced a recession during the 2008 global financial crisis. Recession is generally identified by a fall in gross domestic product (GDP) in two successive quarters.

Independent economist Prof Dr Hoo Ke Ping said recession in the country and globally was imminent, and that the impact of the virus on Malaysia’s economy being felt now is only the beginning of a worsening situation.

He predicted that GDP growth could even fall below 2% by the end of the year, from the government’s initial forecast of 4.8%.

“We base our economy so much on trade and also depend a lot on tourism. Fuel price has also plummeted. We will definitely be hit hard in the coming weeks and months.

“Initially, when the coronavirus was first reported here, I said the GDP could go below 3%. But looking at things now, it could even drop to just 1%,” he said.

Hoo said the country could also take over a year to recover from the current economic downturn.

Ramon and Hoo, however, said despite the anticipated effect on the economy, the move by the government to impose an RMO was the right one and was necessary.

“It’s a question of survival, rather than the economy. We have to go through this period of hardship and sacrifice for the country to do better in the long run,” Ramon said.

Hoo also agreed that the priority should be on saving lives, and that the economy and GDP should be secondary.

“We have to take pre-emptive measures to prevent further escalation of the virus. The rest is not important now. The people must have food and remain in good health,” he said.

Meanwhile, Reuters reported that Singapore was edging towards its first full-year recession in nearly two decades as Malaysia’s travel ban cut off a key source of labour and the Covid-19 pandemic hits the economy, firming the case for Singapore’s central bank to loosen policy.

Spiking cases outside Singapore are adding pressure on the small and open economy. It has already signalled a chance of a recession this year and cut its growth forecasts.

“Financial conditions have tightened considerably in recent weeks, and the lockdowns being imposed by countries to contain the Covid-19 outbreak means a recession in Singapore cannot be avoided,” Reuters quoted ANZ economist Khoon Goh as saying.