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UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting review the recently published labour market figures in Malaysia.

Key Quotes

“Malaysia’s unemployment rate held at 4.8% in the final month of 2020 despite an extension of the Conditional Movement Control Order (CMCO) during the month. The number of unemployed persons increased by 1.1% m/m to a 6-month high of 772.9k (Nov: +2.2% m/m to 764.4k), while the labour force participation rate held steady at 68.4%.

“Going forward, the reinstatement of Movement Control Order (MCO 2.0) since mid-Jan is expected to have a less severe impact on the economy and labour market compared to the previous episode during March-May last year. This comes as most economic sectors are still permitted to operate during this period, and the government has on 18 Jan unveiled extra measures worth MYR15bn under the PERMAI assistance package to sustain the economic recovery. Key initiatives include MYR1.5bn wage subsidy and reintroduction of electricity bill discounts and rebates to support business continuity. We expect the unemployment rate to ease to 4.0% by end-2021 (MOF official forecast: 3.5%) on the back of an uneven economic recovery.”