“On the other, China’s growth slowdown is a dark cloud that would prevent Malaysia from expanding at a faster pace. “We therefore maintain our real growth forecasts of 4.0% for 2021 and 5.0% for 2022,” said Chua and Tan. Fiscal, monetary policy to normalise, albeit at modest paceThe DBS research team opined that policy will start to normalise, but is likely to be modest and drawn-out, staying sufficiently loose to avoid derailing the nascent recovery. “The timing of the hike is contingent on the pace of recovery but any tightening is likely to be less aggressive,” they added. That said, it is difficult to forecast the timing and strength of such a recovery,” they said.
