Moody’s Analytics: MCO 2.0 will impact Malaysia’s economic growth this year

KUALA LUMPUR: The second movement control order (MCO2.0) in key states with bustling economic activities will pose an impact on Malaysia’s economic growth this year, according to financial intelligence company Moody’s Analytics.

Chief Asia-pacific economist Dr Steve Cochrane said the MCO, which is currently being implemented in key economic areas, namely Selangor, Kuala Lumpur, Penang, and Johor, accounted for 60% of Malaysia’s economy.

The Klang Valley alone holds 40% of Malaysia’s economic activities, he noted, and stressed that Malaysia is not in a recession but the strict policies did create some risks of slowing the economy.

“There are a few countries that I worry about the most. We have one country that is Malaysia which we have classified as at risk.

“Malaysia is having trouble controlling the Covid-19 (transmission) after initially doing a pretty good job early on during the pandemic.

“The Philippines and Indonesia are two other countries that are having trouble managing Covid-19,” he said during a webinar on the outlook for the global economy with a spotlight on the Asia-pacific recovery yesterday.

Cochrane said the Philippines and Indonesia were having a hard time to controlling Covid-19 as both countries had not been firm in instituting strict social distancing practices of late.

“The Philippines, which was very strict for a long time, suffered so much from that but it has stopped some of the social distancing measures there, while Indonesia has never really instituted a very strict social distancing,” he added.

Meanwhile, China, Vietnam, Taiwan, and New Zealand are currently seeing economic expansion, mainly due to the effective management of the Covid-19 pandemic.

Overall, Asia-pacific is the strongest region globally and it led the way in economic recovery out of the pandemic moving forward.