KUALA LUMPUR: Malaysia’s central bank kept its benchmark interest rate unchanged at 1.75 per cent on Tuesday, citing a “significant improvement in economic activity” during the third quarter.
If the pandemic recedes, Malaysia’s economy is expected to “improve further” in 2021, in part due to a “turnaround in public and private sector expenditure amid continued support from policy measures’’, Bank Negara Malaysia said in a statement.
However, a recent resurgence of coronavirus infections posed “downside risks” for the country’s economy, the bank warned.
Gross domestic product (GDP) contracted by a record 17.1 per cent during the second quarter in the context of the pandemic, a collapse that fiscal spending pledges of around one-fifth of GDP failed to avert.
Additional spending plans are to be tabled when the government announces its 2021 budget in parliament on Friday. Opposition parties have threatened a vote of no-confidence against Prime Minister Muhyiddin Yassin and are pressing to have their policy recommendations included in the budget. — dpa
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