CapitaLand Malaysia Mall Trust | Annual Report 2020

borders (simultaneous to the MCO) since 18 th March, as part of the government’s proactive decision in its efforts to curb the spread of the pandemic here. The top five (5) tourist generating markets continue to be dominated by Singapore, Indonesia, China, Thailand and India. In 4Q 2020, MOF announced the highest ever Malaysia Budget allocation of RM322.5 billion (or 20.6% of GDP), to help drive domestic demand, shore up confidence and aid economic recovery. Positive global developments i.e. improved economic outlook amid greater clarity on the direction of US policies following the end of US Presidential Election, and positive development surrounding the approval and deployment of COVID-19 vaccines helped to improve investor sentiment. 1.2 IMPACT AND OUTLOOK ON RECOVERY FROM COVID-19, IN THE GLOBAL, REGIONAL AND LOCAL CONTEXT IMF projects global growth to rebound by 5.5% in 2021, reflecting a moderate turnaround after a downturn in 2020. Progress with vaccines and treatments, as well as changes in the workplace, persistent social distancing by consumers to reduce transmission, may allow activity to return more rapidly to pre-pandemic levels than currently projected, without triggering repeated waves of infection. IMF recommends a further extension of fiscal countermeasures into 2021 to lift growth above the forecast, which factors in only the measures implemented and announced so far. The Asia and Pacific region are seen to recover tentatively, but atmultiple speeds. ExcludingChina, the regional economic activity was anticipated to shrink by 2.2% in 2020, due to a sharper-than- expected downturn in key emerging markets notably in India, the Philippines and Malaysia. China, on the other hand, managed a 2.3% growth in 2020. The regional economy is forecasted to rise by 6.9% in 2021 as activities are seen to normalize in the emerging market economies as aided by the stronger recovery in China and developed economies like the United States and the Euro area with better access to vaccines. With the improved global and regional outlook, anticipated improvement in global trade, shored up by the significant stimulus spending allocated by the MOF, Malaysia’s GDP is expected to grow between 6.5% and 7.5% in 2021, after a 4.5% contraction in 2020 according to the Economic Report 2021 published by MOF. As of 10 th February 2021, Malaysia has a total of 251,604 confirmed COVID-19 cases which constitutes only 0.8% of the total population. Possibly due to a more youthful population with a median age of 29 years, Malaysia suffered less than 1% death rate and a recovery rate, as high as 79%. COVID-19 was not seen impacting patients by ethnicity as was the case in the United Kingdom. According to the International Labour Organisation, the most vulnerable communities to COVID-19 in Malaysia includes 2.1 million elderly, 2.8 million B40 households (households with median income less than RM4,850), an estimated 3 million migrant workers and the urban poor living in public housing projects. Selangor, Johor and Wilayah Persekutuan Kuala Lumpur hold the top three (3) ranking in the number of cases reported in the past 14 days by states. MOF has stated that as the country recovers from the impact of COVID-19, the domestic economy will return to a more sustainable growth path. As the focus will be on multiplying foreign direct investment (FDI), building up productivity and re- instilling consumer confidence, the government is also looking at giving continuous essential support for small and medium enterprises (SMEs) to prosper in the new environment, including the potential for expanding globally. After a low economic performance in 2020 due to the COVID-19 pandemic, the Malaysian economy is expected to rebound firmly in 2021. This is in line with the expectation of a more synchronised global recovery. Nevertheless, downside risks to the growth outlook remain, attributed to the resurgence of COVID-19 cases and the time span of containment measures, both domestically and globally. Additionally, geopolitical tensions, volatility in financial and commodity markets together with prolonged trade and tech war may hamper the recovery pace. In view of this, the Government will continue to promote resilient and sustainable economic growth, at the same time safeguarding the welfare of the people. Following a severe impact on global economy and sharp contraction of local economy, the Government announced a series of economic stimulus packages starting with the RM35 billion PENJANA package on 5th June 2020 to propel businesses and stimulate the economy. In addition, the government has unveiled PERMAI, its fifth economic stimulus package on 18 th January 2021, worth RM15 billion spread over 22 initiatives. This is following the implementation of the second movement control order (MCO 2.0) 65 BECAUSE TOMORROW MATTERS