AmBank Group Research expects the Covid-19-induced recession to place both the global and Malaysian economy into technical recession.
The impact from the virus should lessen by the end of this year’s second quarter, and normalisation of both economies should take place in the second half, said AmBank Group Chief Economist and Head of Research Anthony Dass.
Dass, an adjunct Economics professor at the University of New England, Sydney, Australia, noted that unlike the 2008 financial crisis that began from the financial sector, the current economic havoc experienced globally came not from the financial sector, but from a virus that directly harms economic areas like tourism, manufacturing, mining, construction, and agriculture.
“It has also affected businesses in the informal sector. The job market is impacted by retrenchments and many workers going on unpaid leave in many sectors,” he said.
Commenting on the comprehensive economic package to be announced on 27 March, Dass opined that the Stimulus Package 2 (SP2) should be more determined in terms of reaching a more extensive range of target groups and must cover broader economic activities, compared to the RM20 billion SP1.
He also named at least six strategic issues that must be addressed by such package:
- The reduction of unemployment and the increase of job opportunities
- Support for the private sector
- Capacity building for the future
- Support for the SMEs
- The easing of the economic burden of the people, especially those in vulnerable sections of society
- Support for the informal business activities and those working in this sector
Lastly, the focus should also be on “the transportation sector given the rising urbanisation, tourism, green initiatives, education, health, the halal sector, [developing] new technologies (particularly biotechnology), and [upgrading] human resource development (with an emphasis on private tertiary education)”, he said.