KUALA LUMPUR: The systematic roll-out of the national Covid-19 immunisation programme and the country’s economic recovery plan with strict adherence to standard operating procedures (SOPs) will be the key to drive Malaysia back on track, making it stronger by the end of 2021, finance minister Tengku Zafrul Aziz said.
He said that based on current data, the country’s gross domestic growth had gradually shown signs of recovery since the first movement control order (MCO) in March 2020.
“We have many reasons to believe the worst is behind us. I am certain Malaysia will emerge stronger by the end of the year,” he said.
Tengku Zafrul said the economic sectors that were allowed to operate with strict SOPs during MCO 2.0 covered 93% of the economy and this had resulted in an output loss of RM300 million per day compared with the RM2.4 billion per day during MCO 1.0.
He added that the four economic stimulus packages totalling RM305 billion, or more than 20% of gross domestic product (GDP), coupled with the gradual reopening of the economy since early May 2020 had supported the 2020 GDP by approximately four percentage points.
This had also contributed to the 24% increase in the GDP from RM289.4 billion in Q2 2020, to RM357.4 billion in Q4 2020.
In addition, he said the 2021 budget tabled last year along with the Permai assistance package would further complement Malaysia’s economic recovery and cushion implications from the Covid-19 containment measures.
“Moreover, Malaysia’s National Covid-19 Immunisation Programme which commenced on Feb 24 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 explained.
Tengku Zafrul said the ministry was targeting the country’s deficit to be less than 6.2% of GDP for 2021, depending on how fast the economy recovers and the government’s focus on supporting certain sectors to grow the local economy.
The country’s deficit rose to 6.2% of GDP in 2020 from 3.4% in 2019.
Meanwhile, Tengku Zafrul also encouraged all Malaysians to register for the vaccination through the MySejahtera app, or the official website as advertised by the Special Committee on Covid-19 Vaccine Supply Access Guarantee (JKJAV).
“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 a different development, the ex-banker said Bank Negara’s decision to maintain the overnight policy rate at 1.75% at its recent monetary policy meeting would help ease the cashflow of individuals and businesses, encourage consumer spending and spur more lending activities by the financial institutions.
“This will provide an impetus towards our economic growth – complementing the government’s fiscal measures in ensuring a sustainable recovery of the economy.”
The first MCO last year had resulted in a contraction in GDP of 17.1% in the second quarter for 2020. However, the government’s swift action yielded positive results as the country’s economy finally recorded a lower than expected contraction rate of 5.6% for 2020.
The measures also helped lower the unemployment rate from 5.3% in May 2020 to 4.8% in December 2020.
“However, there is still a lot to be done. The 2021 budget and the Permai aid package will help. I am also confident that 80% of Malaysians are expected to be vaccinated by early 2022 and this will drive the country’s economic recovery.
“Meanwhile, the finance ministry and Laksana will continue to ensure that all initiatives are implemented and monitored properly so that our people and country can recover and emerge more resilient than before,” Tengku Zafrul said.
On March 16, 2020, an inter-agency economic stimulus implementation and coordination unit (Laksana) was formed to monitor the implementation of the economic stimulus packages.-FMT