BIMB Integrated Annual Report 2019

For the year under review, we operated against a challenging global macroeconomic backdrop which was marked by the slowest growth pace in a decade. Despite this landscape, BIMB Holdings Berhad (“BHB” or “the Group”) performed above expectations and continued to scale up our focus for growth. 102 Integrated Annual Report 2019 Group Overview Sustaining The Group Management Discussion & Analysis Group Governance MANAGEMENT DISCUSSION & ANALYSIS ECONOMIC AND SECTOR REVIEW Bahrain 2 UAE 3 Pakistan 4 2019 GLOBAL ECONOMIC REVIEW Weak Global Growth Global growth in 2019 recorded its weakest pace since the global financial crisis a decade ago at 2.9% in 2019, according to estimates from the International Monetary Fund. Most major economies fell short of expectations and underperformed in 2019 versus forecasts, given the prolonged US-China trade war, uncertainty over Brexit, and geopolitical tensions. The rising trade barriers and associated uncertainty weighed on business sentiment and activity globally, taking a toll on business confidence, investment decisions, and global trade. Momentum in manufacturing activity weakened substantially to levels not seen since the global financial crisis. Although Asia was caught in the prolonged uncertainty driven by weak trade and investment, the region still remained as the fastest-growing region in the world, accounting for approximately two-thirds of global growth in 2019. Swift Action by the Central Banks Given that global economies seemed to be on the way to a recession, there was a notable shift by the central banks towards accommodative monetary policies with interest-rate cuts as well as a massive quantitative easing measures being instituted. The fiscal authorities have also been actively pump priming the economy via a series of fiscal stimulus measures to ward off the recession risks. Growth remains susceptible to volatile commodity prices and the far-reaching impact from the virus pandemic posed by novel coronavirus (“COVID-19”) which continues to weigh heavily and deeply on fiscal and external balances, while leaving higher levels of debt. Global Impact from COVID-19 What started as an outbreak of the virus COVID-19 in China at the end of 2019 has now developed into a global pandemic, posing a significant risk on global economies. Concerns over travel and mobility have hit tourism-related businesses hard, also paralysing factories and businesses in many countries. At the time of writing, it remains highly uncertain as to when the pandemic would reach its peak. Therefore, economic policies are expected to be expansionary and extremely accommodative in order to minimise the blow.