The RM35 bil Penjana short-term recovery plan is well crafted to mitigate the economic malaise caused by the Covid-19 pandemic, an economist says.
Prime Minister Tan Sri Muhyiddin Yassin who unveiled the plan today said the government realised that the economy needed further stimulus to counter the negative impact of the pandemic.
This is after the government had introduced the RM260 bil Prihatin package in March to provide a much-needed stimulus to the economy which had slowed considerably in view of the outbreak causing massive unemployment and business losses.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told FocusM that the Penjana plan was a well-thought one as it addresses the economy holistically.
“It is well covered. It addresses the concern on the labour market, the transition to a new normal especially in respect of digitalisation as well as the mainstream economy such as properties and automotive. It also shows that the government is committed to promoting growth as it is willing to tolerate higher deficits. Should the reopening of the economy continue to do well, we can expect better growth in the 2H20,” said Afzanizam.
He said he was particularly pleased that the government had introduced measures on the digitalisation and gig economy.
“The matching grant of RM50 mil would encourage the gig economy workers to contribute to Socso and KWSP. This would mean their social safety net is being taken care of. There is also e-wallet of RM50 as well as e-voucher and promotional code that would encourage Malaysians to spend online. Apart from that, matching grants for SMEs to make the digital transformation via training and subsidies should encourage them to leverage on the digital platform,” added Afzanizam.
He also lauded measures to boost the property and auto sectors.
“On the mainstream economics, the reintroduction of House Ownership Campaign and sales tax exemption for automotive CKD products should help to propel the properties and the automotive sector,” said Afzanizam.
There were three main thrusts under the plan, namely to empower the people, propel businesses and stimulate the economy. There were 40 initiatives under the plan.
RM 10 bil would be allocated as a direct fiscal injection into the economy by the government.
Muhyiddin announced that in an effort to rein in rising unemployment and the continuity of jobs, the government will allocate RM9 bil which will benefit three million workers through a few initiatives. – June 5, 2020
