Silver linings amidst the pandemic cloud

For Malaysia macro, we reiterate our revised 2021 real GDP growth
forecast of +4.2% (+5.1% previously); 2020: -5.6%) due to tighter restriction
in May 2021 and lockdown since June 2021. We cut growth forecasts for
non-manufacturing sectors on the supply side, and private expenditure on
the demand side. Global economic recovery plus higher commodity ASPs
cushioned downside to GDP via upgrades in manufacturing and external
trade growth forecasts. Sizeable positive impulse from economic stimulus
– and direct fiscal injection – remains given the additional PEMULIH
package that adds to the yet to be utilized parts of earlier stimulus and
Budget 2021 spending allocation, thus upward revision to Government
consumption expenditure growth and unchanged outlook with regards
anticipated public investment rebound.