Economic expert Professor Dr Jamal Othman has opined that Budget 2021 will not see drastic changes from previous national budgets. However, he expects it to carry initiatives that are similar in nature to the PRIHATIN economic stimulus package and the PENJANA economic recovery plan.
Speaking in a discussion on Bernama TV, the professor said that the upcoming national budget will likely still hinge on aspects such as the people’s employment and income. He also said that the government will not place direct focus on the gross domestic product (GDP) of the country. Rather, the GDP will reflect the effect when the government addresses more pressing issues in the country, such as jobs.
“Faced with the Covid-19 pandemic situation, I think the issue of economic growth is not the highest priority; what’s more important is to protect our ability to continue with our lives (as usual), which is inextricably linked to income. Economic growth will come later on,” said Professor Jamal.
Professor Jamal also predicted that the budget deficit may widen from 5.5% to 6% of the GDP, which is not unusual due the challenging global economic situation in 2020. He explained that countries with open economies will naturally be more affected, and this is reflected in the dip in Malaysia’s exports. Consequently, Malaysia must depend on domestic consumption to aid the country’s economic recovery, although this plan may be hindered by the people’s loss of jobs as businesses are forced to downsize for survival.
That said, the professor noted that Malaysia’s unemployment rate has been on the decline since the record-high rate of 5.3% in May, indicating the success of the PRIHATIN and PENJANA initiatives that were implemented. As of July 2020, the country’s unemployment rate had dropped to 4.7%.
Professor Jamal – who hails from the Economics and Management Faculty of Universiti Kebangsaan Malaysia – specialises in several areas of research, including economic valuation of environmental resources, commodity market, as well as trade, factor market, and rural economics.
(Source: The Sun Daily)