MALAYSIA has significant savings at various institutions whereby these funds can be utilised to generate investment activities, said interim Prime Minister Tun Dr Mahathir Mohamad.
“The accumulated funds at banking institutions, Employees’ Provident Fund (EPF), Retirement Fund Inc (KWAP) and others amount to over RM2 tril,” he told a press conference after announcing the Economic Stimulus Package totalling RM20 bil yesterday.
Malaysia is among the countries that have huge savings, with gross savings of about 26%. The huge savings can be used to generate economic activities for the country.
The stimulus package, themed “Bolstering Confidence, Stimulating Growth & Protecting Jobs” is introduced by the government in efforts to address the impact associated with Covid-19 outbreak on the economy.
To that end, Mahathir stressed that the country has sufficient funds at the moment and would only issue bonds to fund the stimulus package if it deemed necessary.
For example, for EPF, a portion of it can be used by the depositors in the immediate term and help to spur economic activities.
In his speech, he said the employees’ contribution to the EPF will be reduced from 11% to 7%, and this means more or less RM10 bil will go into the hands of the EPF depositors, and hence will stimulate economic growth.
Asked on the disbursement methods for the economic package as there is no sitting Cabinet due to the country’s political developments, he said it would be carried out according to the bureaucratic procedures.
Asked whether the government is still committed to strengthening efforts post-economic stimulus package, he replied: “Yes we are”.
In an earlier announcement, Mahathir said due to the global economic scenario and impacts from Covid-19 outbreak, Malaysia’s gross domestic product (GDP) growth in 2020 is estimated to be in the range of 3.2% to 4.2%.
“I am confident the economic stimulus package will enable the Malaysian economy to achieve the highest point of the range.
“In formulating the stimulus package, the government exercised prudence with respect to its fiscal position. As a result of the stimulus package, the fiscal deficit is estimated to slightly increase to 3.4% of GDP compared to the original target of 3.2% of GDP,” he said.
In 2003, the government introduced a stimulus package of RM8.1 bil to boost the economy that was hit by the Severe Acute Respiratory Syndrome (SARS) pandemic. – Feb 28, 2020, Bernama
