Al-`Aqar Healthcare REIT Annual Report 2019

Market Report Summary Global Economy Modest pickup in 2020 Global growth, estimated at 2.9% in 2019, is projected to increase to 3.3% in 2020 and inch up further to 3.4% in 2021. Compared to the October World Economic Outlook (WEO) forecast, the estimate for 2019 and the projection for 2020 represent 0.1 percentage point reductions for each year while that for 2021 is 0.2 percentage point lower. A more subdued growth forecast for India accounts for the lion’s share of the downward revisions. The global growth trajectory reflects a sharp decline followed by a return closer to historical norms for a group of underperforming and stressed emerging market and developing economies (including Brazil, India, Mexico, Russia and Turkey). The growth profile also relies on relatively healthy emerging market economies maintaining their robust performance even as advanced economies and China continue to slow gradually toward their potential growth rates. The effects of substantial monetary easing across advanced and emerging market economies in 2019 are expected to continue working their way through the global economy in 2020. The global growth estimate for 2019 and projection for 2020 would have been 0.5 percentage point lower in each year without this monetary stimulus. The global recovery is projected to be accompanied by a pickup in trade growth, reflecting a recovery in domestic demand and investment, as well as the fading of some temporary drags in the auto and technology sectors. These outcomes depend to an important extent on avoiding further escalation in the US-China trade tensions, averting a no- deal Brexit, and the economic ramifications of social unrest and geopolitical tensions remaining contained. (Extracted from World Economic Outlook, International Monetary Fund, January 2020) Malaysia Economy Malaysia’s GDP growth rate is forecast to reach 4.5% in 2020, with increase headwinds In 2020, Malaysia’s economy is projected to expand at a relatively moderate pace, amid continued uncertainty and external headwinds. The GDP growth rate is projected to reach 4.5% in 2020. Investment is expected to improve but remain subdued over the near term, with both the public and private sectors adopting a cautious stance towards capital spending. Similarly, the softness in export growth is likely to persist into next year, mirroring the continuing subdued global growth. Federal debt has increased, and government revenue as a share of GDP is expected to decline further in 2020. In the context of a more uncertain economic environment, it is vital for Malaysia to preserve fiscal space to enable it to mitigate the impact of any negative shocks to the economy. Increased progressivity in the personal income tax framework and an expansion of current tax measures could enable the government to both increase revenues and improve redistribution. ECONOMIC OVERVIEW 03 STRATEGIC PERFORMANCE 52