MALAYSIA still needs more fiscal support despite “strong” relief measures as it is among the worst-hit economies in the region with potentially long-lasting impact due to its dependence on tourism and trade, said Moody’s Analytics.
Travel and tourism, said Moody’s Analytics, accounted for 5% of the country’s gross domestic product (GDP).
Malaysia also has the highest labour market exposure, aside from China, with more than 14% employed in the travel and tourism sector.
But Malaysia joins Thailand, Singapore, Australia and Japan as among the countries that provided “the strongest fiscal boost to their economies,” Moody’s Analytics said in a July 24 note.
Such spending, Moody’s said, had been critical in supporting income and spending even as strict lockdowns and a loss of trade and manufacturing created deep downturns in the second quarter.
Malaysia had implemented relief measures close to RM300 bil with direct fiscal injection being RM30 bil.
Moving forward, the research house believes that Malaysia would see a rebound in the third quarter.
Tailwinds include China’s continued recovery, said Moody’s Analytics, as Malaysia has “solid links to China” through tech-producing industries as well as crude oil and palm oil. – July 24, 2020
