KUALA LUMPUR, July 1 — Malaysia’s third quarter economic performance will be critical in determining how the economy will play out in 2020, says S&P Global Ratings. Asia-Pacific economist Vishrut Rana said while the local economy is well-positioned to recover, the path towards recovery...
Wednesday, 01 Jul 2020 08:45 PM MYTKUALA LUMPUR, July 1 — Malaysia’s third quarter economic performance will be critical in determining how the economy will play out in 2020, says S&P Global Ratings.
“Which means, Malaysia is well-placed for a recovery and normalisation in activity in the third quarter,” he told a webinar titled “Malaysia - Fiscal And Debt Risks Reflect Impact of COVID-19” here today. He also stressed that the third quarter would be critical for the ratings agency to determine how 2020 would play out for Malaysia—should there be a normalisation in economic activity and household spending, as well as low numbers of COVID-19 new cases, economic growth would likely happen.
“Secondly, the speed of recovery in the labour market is key. If the unemployment rate continues to grow, this will likely cause household income to fall, which will then cause a reduction in spending and economic growth,” he said. “Compared with regional peers, we believe Malaysian banks are facing COVID-19 related challenges from a pretty strong stance given their historical low nonperforming loan ratio and historical high capital ratio, as at the end of last year,” she said.
Answering a question in reference to recent reports of Sarawak’s sales tax lawsuit against national oil and gas company Petronas, Asia Pacific, Corporate Ratings associate director Shawn Park said: “Petronas has the financial capacity and operational resources to manage any potential downside to their cash flow.
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