Bank Islam Malaysia Bhd expects sthe small and medium enterprises’ (SMEs) gross domestic product (GDP) to grow 4.5 per cent next year.
The post-Movement Control Order (MCO) environment would present huge opportunities to the SMEs as long as they remain competitive, said Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid.
Afzanizam said in the past, SME GDP growth had tended to accelerate much faster than the overall economy by a factor of 1.09 compared to the GDP of the country.
He said while Bank Islam projected the GDP to grow 3.5 per cent next year, the SME industry would grow higher at 4.5 per cent in 2021 and 5.8 per cent in 2022 (compared to the 4.7 per cent projection of GDP growth).
He said one of the important indicators of recovery in the economy was the data from Malaysia’s Industrial Production Index (IPI), which had increased by 18.2 per cent month-on-month in May from 30.5 per cent fall in the previous month.
“In light of close correlation with Malaysian economy, the SME GDP is expected to decline by-1.0 per cent in 2020 (Malaysia: -1.5 per cent) before rebounding to 4.5 per cent (Malaysia: 3.5 per cent) in 2021 and 5.8 per cent (Malaysia: 4.7 per cent) in 2022.
“SME GDP tend to accelerate much faster than the overall economy by a factor of 1.09. With the right policy in place, a swift recovery can be expected,” he said.