Kuala Lumpur (VNA) - The World Bank (WB) has revised down Malaysia’s economic growth forecast this yearto a contraction of 4.9 percent, from an early estimate of minus 3.1 percent, following asharper than expected contraction in the second quarter of 2020.

According to the WB’s October 2020 Economic Update for East Asia and the Pacificpublished onSeptember 29, the change in its GDP forecastfor Malaysia reflects the heightened uncertainty surrounding the start andspeed of the global recovery, which would weigh on investment decisions andexternal demand.

The WB said the Malaysian economy had been severely affected by thepandemic, leading to a double-digit GDP contraction of 17.1 percent in thesecond quarter of 2020.

The contraction was drivenprimarily by a decline in domestic demand due to the imposition of the movementcontrol order (MCO) to stem the spread of COVID-19, as well as weak external conditions.

The WB’s revised 2020 GDP forecast for Malaysia is within Bank NegaraMalaysia's (BNM) contraction forecast of between 3.5 percent and 5.5 percent for the year.

According to BNM's statement onAugust 14 on the economic and financial developments in Malaysia in the secondquarter of 2020, the country's GDP is, however,expected to grow between 5.5 percent and 8 percent in 2021./