PROSPECTS of another stimulus package to tide the economy over the adverse impact of the latest movement control order (MCO 3.0) seems unlikely given the state of the Government’s current finances.
For now, the Government has hinted that the best solution in balancing between protecting the lives and well-being of the people is through targeted and tightened MCO, according to TA Securities Research.
“Though we predict no more stimulus plans in the near term, the key question remains: how much do we have left for further direct fiscal support from the Government before there is a need to raise the statutory debt ceiling,” commented economists Shazma Juliana Abu Bakar and Farid Burhanuddin in an economic note.
As it is, the research house noted that the 1.5% of gross domestic product (GDP) gap between 58.5% and the 60% statutory debt ceiling works out to be roughly RM22.8 bil based on a simple back of the envelope calculation by using Bank Negara Malaysia’s (BNM) figure that Malaysia’s nominal GDP stand at RM1.39 tril for 2020 and RM1.53 tril for 2021.
“Should such situation (doling out of economic stimulus packages) is warranted, we expect participation from the private sector,” reckoned TA Securities Research.
As part of its targeted assistance to help affected individuals and businesses, the Government has channelled RM4.68 bil under Bantuan Prihatin Rakyat which has benefited 8.4 million B40 recipients.
Meanwhile, the various skills and talent development programmes have enabled 137,290 people to secure jobs, while the Government’s wage subsidies have aided more than 330,000 employers in maintaining 2.7 million jobs.
For the business sector, there is still a soft loan fund of RM5.2 bil from BNM for small medium enterprises (SMEs) and a loan guarantee facility of RM39 bil under the Prihatin Guarantee Scheme.
For micro-SMEs, a Special Prihatin Grant (GKP) of RM900 mil has been disbursed and in June 2021, a GKP3.0 of RM1 bil (or RM1,000 to one million micro-SMEs) will be paid out while 95% of the 1.6 million applications for the Targeted Repayment Assistance had been approved so far.
Additionally, the Government is also beefing up the country’s healthcare needs with the latest funding of RM200 mil, pushing the allocation to address COVID-19 to public health to RM1 bil.
The extra allocation is to increase the capacity of intensive care units and beds in the Health Ministry’s (MOH) hospitals, University Teaching Hospitals as well as support Mindef (Defence Ministry) field hospitals.
Provisions will also be increased to upgrade equipment, medicines and related consumables and the appointment of medical officers on contract basis, including retirees. A total of RM5 bil is also allocated to purchase vaccines and speed up the implementation of the nationwide inoculation exercise in the quest to achieve herd immunisation. – May 24, 2021
