PETALING JAYA: Economists are cautiously optimistic that Malaysia’s growth rate will recover despite the ongoing Covid-19 pandemic.

Prof Dr Barjoyai Bardai of Universiti Tun Abdul Razak said this is based on information provided by various monetary institutions, including the International Monetary Fund.

“The economy is poised to turn around in the fourth quarter, when we expect to see growth of between 2% and 4%,” he told theSun.

“Next year, we can expect a rapid growth rate of between 6% and 8%. The economy is moving in this direction with the government’s recent move of not reimplementing the movement control order despite a surge in Covid-19 cases,” he added.

The Health Ministry’s targeted approach to curb the pandemic is not expected to affect the overall economic growth and business operations, although reports have suggested there will be a rise in positive cases in the next three months, he added.

Malaysian Employers Federation executive director Datuk Shamsuddin Bardan agreed with Barjoyai, saying that Malaysia has been on track before the pandemic worsened.

This can be seen in the nation’s unemployment rate in July, which stood at 4.8% but later dropped to 4.7%, he said.

“Additionally, talks between Malaysia and China can assure business sectors to give us the chance of getting a vaccine and resume full operations for our economic recovery,” he said.

UOB senior economist Julia Goh cautioned that the recent surge in Covid-19 cases and implementation of the conditional movement control order in Sabah, Selangor, Kuala Lumpur and Putrajaya may put a strain on the labour market’s recovery.

“The unemployment rate may remain elevated between 4.7% and 5% in the coming months,” she said in a statement.

The key component that will spur the economy lies in the government’s Budget 2021, which will likely align with the 12th Malaysia Plan to address both short and medium- term issues.

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Meanwhile, economist Tan Sri Ramon Navaratnam echoed Barjoyai’s sentiment, but stressed the economy can only recover with a strong combined effort from the public and private sectors and the government to flatten the curve.

“The government’s hands are tied due to fiscal constraints,” the director of the Asia Strategy and Leadership Institute reiterated.

“The government needs to modify the New Economic Policy to make it acceptable to private sectors to move forward,” he said, adding this can be done via the concept of shared prosperity.