M’sia’s productivity dived by -5.4% last year, rebound expected by IMF

THE nation’s productivity tumbled by -5.4% last year, compared to 2019, due to the COVID-19 triggered economic turmoil, domestically and internationally.

Malaysia Productivity Corporation (MPC) said the decline was the first since the 2008 global financial crisis and the lowest in a decade.

However, it was optimistic that Malaysia’s productivity level will improve due to the projected economic rebound this year.

“The decline is inevitable. It is a global pattern due to the impact of the pandemic.  Rest assured this is only temporary as productivity is set to increase this year, in line with the International Monetary Fund’s (IMF) forecast on Malaysia’s gross domestic product (GDP) growth by 7% this year,” said MPC director general Datuk Abdul Latif Haji Abu Seman, in a statement.

On that note, Latif commended the Government efforts in initiating and implementing many incentives to sustain productivity during the COVID-19 crisis, as they will become the key drivers to boost productivity this year.

Digitalisation is the key

He added that efficient distribution of the incentives through a transparent process and well-publicised communication is critical, adding it should target productivity improvements, and the outcomes need to be measured to evaluate their effectiveness.  

“Conducive business environment drives productivity to the desired level. MPC’s is focused on reducing the unnecessary regulatory burden and strengthening delivery, to help the business community and boost productivity at the firm level,” Latif stressed.

He then urged the public and private sectors to improve on their productivity and competitiveness.  Enterprises are to focus on production process efficiency and leverage on digital technology to widen market reach.

“Malaysians must reset our minds to productive mindset.  We can do more with less.  Together we can ensure Malaysia productivity rebound is a reality,” Latif remarked. – Feb 23, 2021.

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