AS Covid-19 continues to rattle global economies with Malaysia also not spared, the government has made health and economic stability as its main agenda in getting through the challenging times.
An analyst said that the additional announcement of the extra RM10 bil under “Prihatin Tambahan” from the previously announced RM250 bil would benefit small and medium enterprises (SMEs) as well as their workers as a whole, and would safeguard millions of jobs across all sectors.
“This targeted move would ease the financial burden faced by SMEs today while ensuring job security as well as financial continuity of businesses as well as employees in the next six months.
“The move would also support the industry even after the Movement Control Order (MCO) has ended. This is seen as a far-sighted move from the government to not only tackle the Covid-19 situation, but to address the recession impact of it as well,” she said.
Malaysia has implemented an MCO since March 18 and the current phase will continue until April 14.
Bank Negara Malaysia last week in its briefing said that unemployment is expected to see an increase to 4% from the current 3.3% because of Covid-19 as well as global headwinds.
On the fiscal situation, the analyst said at this juncture, the government is encouraged to increase spending even though the deficit might see an increase to 4% in the short term.
“If we see from previous crises that we have weathered, including the 1997 Asian Financial Crisis, the 2008 Global Financial Crisis and the 2003 SARS outbreak, the government has always increased its spending to boost the local economy.
“Even though the deficit increased in the subsequent year, the ripple effect from the new stimulus package will continue in the following year, which would translate into a healthy gross domestic product (GDP) growth,” she said.
SMEs, which account for about 98.5% of businesses with some six million workers nationwide, have been the worst affected segment of the economy. They tread a thin line between workers’ welfare and business continuity, and government relief is much needed to ensure they can weather the storm.
SMEs employ a large segment of the local workforce while contributing more than one-third of the GDP as well as playing a vital role in ensuring supply chain progression for bigger companies.
Prime Minister Tan Sri Muhyiddin Yassin in his special address today expressed hope the assistance would ease businesses’ financial burden and ensure job continuity for millions of Malaysians, noting that the government will continue to ensure prudent fiscal spending and will table an additional budget at the next parliamentary sitting.
Parliament is expected to resume its sitting on May 18 after being postponed due to the Covid-19 health crisis. -- April 6, 2020, Bernama