UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting, reviewed the recently announced measures by the Malaysian government.
“The government announced a package of measures focused on “bolstering confidence, stimulating growth, and protecting jobs” in light of the COVID-19 outbreak. The total package is MYR 20bn (or 1.3% of GDP), of which MYR 3.0bn is additional spending from the Federal Government, MYR 3.5bn are soft loans from BNM, and MYR 12.7bn relates to the contribution from reduction in EPF employee contribution rate.”
“Key measures are aimed to 1) mitigate the impact of COVID-19, 2) spur people centric growth, and 3) promote quality investments. The measures help to ease cash-flow and lower cost for affected sectors (including tourism, transport, hotels, restaurants, and retail).”
“The government lowered its 2020 growth projections to 3.2% – 4.2% (from 4.8% previously). The fiscal deficit target is revised to 3.4% of GDP in 2020 (vs. 3.4% in 2019 but wider than initial target of 3.2%). We think the measures are encouraging from aspect of assistance to hardest hit sectors, affected individuals, stimulating private spending, and promoting investments.”