KUALA LUMPUR, Sept. 22 (Xinhua) -- The Asian Development Bank (ADB) on Wednesday revised down Malaysia's growth forecast this year to 4.7 percent from an earlier projection of 5.5 percent in July.
The main factors for the revision are the resurgence of COVID-19, causing the reimposition of nationwide containment measures and a lockdown, and continued political instability, the ADB said in a report.
"The lower growth outlook is consistent with weaker growth prospects for the U.S. and Japan, key markets for Malaysian exports," it said.
According to the ADB, several downside risks could undermine Malaysia's near-term prospects.
Externally, a weaker global economic recovery, coupled with tapering in the United States, could cause greater financial market volatility and trigger capital outflows.
Domestically, COVID-19 mutations and weak political support for the new government could cause further uncertainty, undermine business confidence, and delay the progress of its reforms that are crucial for the economy to recover from the pandemic.
The ADB, however, revised up Malaysia's growth forecast for 2022 to 6.1 percent, from its previous projection of 5.7 percent.
This higher projection is contingent on the progress of the national COVID-19 vaccination campaign, it said.
"But even if there is a robust recovery next year, growth will still be about 10 percent lower than its pre pandemic trajectory," it added.