Stimulus package can cushion Covid-19 impact

KUALA LUMPUR (Feb 13): MIDF Research expects Malaysia’s economy to grow 4.5 percent this year contributed by steady domestic demand and recovery in mining and construction sectors.

The research house said although the mining sector remained in negative territory in the fourth quarter of 2019 but the sector has showed some improvement and is expected to continue to recover this year as the impact from supply distribution wanes.

“In addition, Petroliam Nasional Bhd announced that its second floating LNG (PFLNG) unit is expected to be operational in the second quarter of this year, giving an impetus to the mining sector,” it said in a research note today.

MIDF Research said the gradual pick-up in commodity prices would also support the oversea sales of crude oil and natural gas, as well as palm oil for this year.

Meanwhile, it said the recent overnight policy rate cut by 25 basis points to 2.75 percent in January and the upcoming Government stimulus package is expected to lift domestic demand.

However, it added the Covid-19 epidemic could have a negative but temporary influence on tourist arrivals.