25th January 2021 - 2 min read
Finance Minister Tengku Zafrul Abdul Aziz has said that the reimplementation of the movement control order (MCO 2.0) will cause the country to lose an estimated RM600 million each day.
In comparison, Malaysia’s first MCO – which was implemented in mid-March 2020 – saw a loss of RM2.4 billion on a daily basis. By May 2020, the country had incurred an estimated loss of RM63 billion.
“This MCO is unlike the one in March last year as five essential sectors are still open; small and medium enterprises (SMEs) such as stalls and stores can still be opened,” explained Tengku Zafrul. The five essential sectors that he referred to include manufacturing, construction, services, trade and distribution, as well as plantations and commodities.
Tengku Zafrul also emphasised that even though the five sectors are still operating, the government cannot leave things to chance as the duration of the second MCO is dependent on the control of Covid-19 case transmissions. This has prompted the government to reveal the PERMAI assistance package.
The finance minister said that the latest assistance package is an improvement of the initiatives already announced in Budget 2021, as well as ongoing initiatives in the PRIHATIN and PENJANA packages introduced last year. He added that the package was also prepared particularly for businesses that were unable to operate normally. “For now, we are maintaining our gross domestic product (GDP) growth projection. This is also one of the reasons for PERMAI to be implemented,” he said.
Tengku Zafrul further highlighted that despite seeing a contraction of 2.7% in the third quarter of 2020, Malaysia’s GDP was still one of the best-performing in the ASEAN region. He was comparing it to the performance of countries such as Indonesia (-3.5%), Singapore (-7%), Philippines (-11.5%), and even the US (-2.9%).
Aside from that, Tengku Zafrul said that although the government had allocated RM15 billion with an additional fiscal injection of RM6.6 billion through the PERMAI package, Malaysia’s fiscal deficit projection remained unchanged from 5.4% thus far. “The people need to understand that the government has done its best and regularly deliberates with the Ministry of Health on the economic aspect to ensure that efforts are balanced,” he said.
(Source: The Edge Markets)
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