This issue examines the performance in the first half of 2021 and prospects for the domestic economy. One key conclusion is that the economy is rebounding from the deepest economic slump at a pace that exceeded expectation, with real GDP increasing by 5 percent in first quarter as compared to a decline of 0.2 percent in the fourth quarter of last year, overwhelmingly driven by exports demand. Another key conclusion is that the economy continues to exhibit features of pre-modern growth, with the mining and quarrying still as the leading sector and manufacturing sector stagnated at around 5 percent of real gross valued at 2016 prices and growth was concentrated on few sectors. Thus, the character of economic growth does not bode well for achievement of the national aspiration of prosperity for all by 2036. The other major conclusion is that domestic outlook has markedly improved in the post-budget speech period; the domestic economy is now projected to grow by 9.7 percent in 2021, up by 0.8 percentage point from previously projected. However, growth will be less evenhanded, with mining and quarrying projected to overwhelming generates the growth. This will be largely supported by export demands and by moderate recovery of domestic demand following relaxation of containment measures on account of successful vaccination roll-out programme. Despite that the expected sharp economic revitalization domestic output is not expected to return to pre-crisis projected levels in the near term.

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