Malaysia: Government reallocates extra assistance – UOB

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UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting review the recent measure announced by the Malaysian government.

Key Quotes

“The government announced an assistance package (PERMAI) yesterday (18 Jan) worth MYR15bn. This follows recent tightening of measures to contain the COVID-19 pandemic. The assistance package does not require new funding as it will be financed through reallocation of existing funds. We estimate about ~MYR4.0bn worth of government funds reallocated for this package.”

“The PERMAI assistance package improves on the existing initiatives and accelerates the implementation of related initiatives. The package is anchored on three key objectives – 1) combating the COVID-19 outbreak, 2) safeguarding the welfare of the people, and 3) supporting business continuity.”

“The latest package reaffirms that fiscal support is ongoing to sustain the economic recovery despite the current challenges… We pencilled in a 25bps OPR cut to a new low of 1.50% in 1Q 2021. However, the pressure to ease may be lesser with the latest assistance measures and government’s assessment that the economic impact from current MCO is more manageable.”

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