Presenting the group’s quarter economic tracker, SERC executive director Lee Heng Guie said he believes the second quarter of 2020 was the low point, pointing to signs of recovery in the second half of this year even though there is still an economic contraction.

“I believe this year is a year of stability and recovery, but I continue to see very uneven performance in some sectors that warrant continued monitoring by the government to make sure the recovery is more broad-based and sustained going into next year,” he said.

Lee said that industries reliant on the free movement of people, like tourism and transportation, would continue to face difficulties, while sectors allowed to operate more normally like manufacturing would be faster to rebound.

According to the statistics department, he said, the 15.3% year-on-year growth in manufacturing sales recorded in March was the biggest jump in 44 months.

He projects GDP to grow by 4% this year, but could expand by as much as 6% year-on-year if the vaccine rollout ramps up significantly, virus transmission is curbed, consumer spending increases after a year of suppressed demand, and international travel is able to resume.

Lee said MCO 2.0 and the recently imposed MCO3.0 in large economic sectors like the Klang Valley would not be as damaging as the original lockdown in March 2020 as they are less restrictive. However, the “scarring” effect they may have on consumer sentiment and investors remains to be seen.

He said that exports have been a “bright spot” that will be an important driver in the GDP recovery, with exports expected to grow 9% this year.

“We have continued to surprise the market and shown strong growth especially in the electrical and electronics sector, rubber products and transport equipment,” he said, adding that metal and chemical products were also up year-on-year.

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