FINANCE Minister Tengku Datuk Seri Zafrul Abdul Aziz must explain on how Malaysia is going to achieve a gross domestic product (GDP) growth between 6.5% and 7.5% this year when the global economy is battered due to COVID-19.
“Malaysia is an export-oriented nation which means our economy is dependent on the prosperity of other counties.
“But many countries have cut back due to sluggish economy. In my view, the growth projection by Tengku Zafrul is too high,” Parti Sosialis Malaysia (PSM) central committee member Sharan Raj told FocusM.
In a recent interview with Bloomberg, Tengku Zafrul maintained that Malaysia would see a GDP growth from 6.5% to 7.5% this year
“It is still early and we are still in the first quarter of the year. So, we are maintaining it [for now] but our forecast is at risk given with [what is happening] during movement control order (MCO 2.0).”
He also based his projection on the recently announced PERMAI stimulus package worth RM15 bil which would help mitigate impact on the local economy.
However, many politicians and economists in the past have poured cold water on the minister’s optimistic figures, saying that it was far-fetched.
Touching on the matter, Sharan said excluding the palm oil industry, every other economic sector in Malaysia is still struggling from the effects of the pandemic.
He added that the International Energy Agency (IEA) had cut global oil demand for this year, which affects oil revenue, a major income contributor for Malaysia.
Low income, high bills
“According to the International Air Transport Association (IATA), the global tourism and aviation sector will not recover until 2023 which is also big economic driver for Malaysia.
“On top of that, mass events such as weddings, functions, seminars, conferences, family gatherings and religious festivals, a big source of domestic tourism, are also cancelled,” Sharan pointed out.
In terms of costs, the PSM leader reminded the Government that Malaysia will be paying approximately RM60 bil this year for food and fuel imports.
Sharan also dismissed notion that Malaysia’s economy this year will be propelled by domestic consumption, adding many have lost their jobs and had their salaries cut.
According to Khazanah Research Institute (KRI), 1.2 households or more than four million Malaysians are at risk of falling into absolute poverty. The unemployment and underemployment numbers continue to soar nationwide.
“People have problems even to buy milk for their children. So, talking about how domestic consumption will boost Malaysia’s growth at this juncture is utter nonsense,” he argued.
Offering solutions, Sharan urged the Government to face reality and focus on internal growth as in boosting local economy.
“The Government should focus on developing our local sectors such as agriculture and renewable energy (RE). We have to get creative and stop relying on status quo,” he added. – Jan 25, 2021.
