Malaysia’s economic outlook for 2021 is too close to call as there are too many variables beyond its control, said UHY Malaysia Managing Partner, Datuk Alvin Tee Guan Pian.

While the outlook for Malaysia was generally positive, with the country earmarked to be one of the bright sparks in 2021, the concern was that there were many unknowns in the equilibrium, Tee added.

The International Monetary Fund has projected Malaysia’s economy to rebound by seven per cent this year, supported by both domestic and external demand.

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An August survey Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) noted that 39.4 per cent said they were expecting an L-shaped recovery.

“This means they anticipate the Covid-19 virus will be slowly contained, with weak or no growth in 2021. A look at going concern modifications during and at this Covid-19 time should set alarm bells ringing,” Tee said in a statement today.

A going concern modification is the expressed uncertainty that a company is unable to continue in the near future or if the company will exist for another 12 months.

As at November 13 last year, Audit Analytics observed that some 171 firms globally had received a going concern modifications with a direct co-relations to Covid-19.

Among firms affected are Italy’s infrastructure giants Atlantia SpA, Aston Martin Lagonda Global Holdings PLC, a luxury sports car manufacturer, and oil and gas entity Tullow Oil PLC.

The vast majority (78 per cent) of companies receiving going concern audit opinions are small-cap companies, with a market capitalisation of under 100 million euros.

This observed trend remains unchanged, suggesting that smaller companies are continuing to be significantly impacted by the uncertainties surrounding the Covid-19 pandemic.

Of the companies that have received a going concern audit opinion related to coronavirus, 25 per cent are in the manufacturing industry and 25 per cebt are in the services industry.

“The government has been doing its best to help, but there is no denying small businesses are failing due to Covid-19. The fact is if the vaccine is effective and arrives as soon as possible, and the virus mutation is not a big factor, then all this will just be academic”, said Tee.

He pointed out that the World Health Organisation had dropped a mini bombshells this week, when its chief scientist Dr. Soumya Swaminathan reportedly stated that he was not confident that the vaccine prevented transmission of Covid-19.

This was followed by a disclosure by Dr Sam Toroghi, who operates a YouTube page called Chatter Docs, where he discusses medical issues like Covid-19 that he was tested positive for Covid-19 despite being admistrated the Pfizer vaccine.

“But if there is a hitch, then I fear that we should fear the unknown,” said Tee.

London-based UHY, which was established in 1986, is a network of independent accounting and consulting firms with offices in nearly 296 major business centres in 89 countries.