Besides Malaysia, ASEAN-5 includes Indonesia, Thailand, Philippines and Vietnam which are set to expand by 8.2 per cent, 6.1 per cent, 7.6 per cent and seven per cent, respectively.
For 2020, the Washington-based organisation forecast Malaysia’s economy to contract 1.7 per cent, as the ASEAN-5 GDP shrinks 0.6 per cent.
The IMF’s 2021 projection for Malaysia is higher than Fitch Ratings’ growth forecast of 5.8 per cent.
Global growth is expected to rebound to 5.8 percent in 2021, well above trend, reflecting the normalisation of economic activity from very low levels, said IMF in a report released today.
It projected -3 per cent global growth for 2020, which is largely affected by COVID-19 pandemic.
“The advanced economy group is forecast to grow at 4.5 per cent, while growth for the emerging market and developing economy group is forecast at 6.6 percent,” it said.
In comparison, in 2010 global growth after the global financial crisis rebounded to 5.4 per cent from -0.1 per cent in 2009.
However, the rebound in 2021 depends critically on the pandemic fading in the second half of 2020, allowing containment efforts to be gradually scaled back and restoring consumer and investor confidence, IMF said.
Significant economic policy actions have already been taken across the world, focused on accommodating public health care requirements, while limiting the amplification to economic activity and the financial system.
The projected recovery assumes that these policy actions are effective in preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains.
Nonetheless, the level of GDP at the end of 2021 in both advanced and emerging market and developing economies is expected to remain below the pre-virus baseline.
As with the size of the downturn, there is extreme uncertainty around the strength of the recovery.
“Some aspects that underpin the rebound may not materialise, and worse global growth outcomes are possible — for example, a deeper contraction in 2020 and a shallower recovery in 2021 — depending on the pathway of the pandemic and the severity of the associated economic and financial consequences.”