(Mar 27): Going by the downbeat forecasts, “lower for longer” applies not just to interest rates but also oil prices, even as more countries enter into various degrees of lockdown to contain the spread of Covid-19.

Already in uncharted waters, thanks to a decade of unconventional monetary policy, the global economy now faces the challenge of another recession, one whose road to recovery is still uncertain and may not see as big a lift from China’s economic growth as it did a decade ago, post the 2008/09 subprime bubble-induced GFC.

Malaysia — which projected gross domestic product growth to range between 3.2% and 4.2% for 2020, before oil prices halved precipitously to US$30 a barrel on March 9 — last saw a recession in 2009. That year, the economy contracted 1.5% for the full year, shrinking as much as 5.8% in the first quarter. Further GDP downgrades are expected worldwide should Covid-19 infections continue to rise. Recently, Standard Chartered Bank Research slashed its 2020 GDP forecast for Malaysia to 2.5% from 4.2% “to reflect a greater hit to local and external demand from a more protracted outbreak”, but raised 2021 GDP forecast to 4.8% from 4.4% “on a favourable base effect”.

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