Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz expects Malaysia to emerge stronger by the end of 2021, with the systematic roll-out of the National COVID-19 Immunisation Programme as well as the economic recovery plan with strict adherence to standard operating procedures (SOPs) being key to driving the country back on track.
He noted that Malaysia’s gross domestic growth had slowly showed signs of recovery since March last year when the government introduced the movement control order (MCO) 1.0, reported Bernama.
“We have many reasons to believe that the worst is behind us. I am certain that Malaysia will emerge stronger by the end of the year,” said Tengku Zafrul.
During MCO 2.0, the economic sectors allowed to operate based on strict SOPs accounted for 93% of the economy. The reimplementation of the MCO led to a daily output loss of RM300 million, down from the RM2.4 billion daily output loss registered during MCO 1.0, he said.
The four economic stimulus packages amounting to RM305 billion, or over 20% of gross domestic product (GDP), and the economy’s gradual reopening since early May 2020 supported last year’s GDP by around four percentage points.
This also contributed to the 24% hike in the GDP to RM357.4 billion in the fourth quarter of 2020 (Q4 2020) from RM289.4 billion in Q2 2020.
Budget 2021 and the PERMAI assistance package are also expected to further complement the country’s economic recovery while cushioning the implications of the COVID-19 containment measures.
“Moreover, Malaysia’s National COVID-19 Immunisation Programme, which has commenced since late February 2021, will support the reopening of our economy and spur business activities. This will be supported by a robust recovery in global trade and higher crude oil prices,” he said.
Tengku Zafrul revealed that the ministry targets a deficit of less than 6.2% of 2021 GDP, depending on the speed of economic recovery as well as the government’s focus on supporting certain sectors to grow the local economy.
Last year, Malaysia’s deficit climbed to 6.2% of GDP, from 3.4% in 2019, reported Bernama.
Meanwhile, the Finance Minister urged Malaysians to register for vaccination via the MySejahtera app or through the official website advertised by the Special Committee on COVID-19 Vaccine Supply Access Guarantee.
“It is crucial for the country to achieve herd immunity as soon as possible to ensure full recovery of the economy, including sectors that were hit hardest such as tourism, retail and aviation.”
On Bank Negara Malaysia’s decision to keep the Overnight Policy Rate (OPR) at 1.75%, Tengku Zafrul believes the move would help ease the cash flow of businesses and individuals, spur lending activities by financial institutions and encourage consumer spending.
“This will provide an impetus towards our economic growth — complementing the government’s fiscal measures in ensuring a sustainable recovery of the economy,” he said.
Meanwhile, the Finance Ministry presented its accomplishments for one year in conjunction with the first year anniversary of the Perikatan Nasional government.
The report revealed that the pandemic resulted in an unprecedented socio-economic impact in Malaysia, with a loss of around RM2.4 billion daily to the economy during MCO 1.0.
With this, the government formulated a 6R strategy – namely, Resolve, Resilient, Restart, Recovery, Revitalise and Reform.
“The implementation of various types of initiatives including the PRIHATIN Economic Stimulus Package is supported by the use of current data, which enables immediate intervention and coordination to ensure effective delivery,” said Tengku Zafrul.
Due to the MCO 1.0, Malaysia saw its GDP contracted by 17.1% in Q2 2020. The government’s swift action, however, yielded positive results, with the economy registering a lower-than-expected contraction of 5.6% in 2020.
With the measures, the unemployment rate fell to 4.8% in December 2020 from 5.3% in May 2020.
“However, there is still a lot to be done. Budget 2021 and the PERMAI aid package will help. I am also confident that 80% of Malaysians are expected to be vaccinated by early 2022 which will drive the country’s economic recovery,” he said.
Image source from Tengku Zafrul’s Official Facebook Page
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